10-QPeriod: Q3 FY2013

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q3 Ended Jul 31, 2013

Filed September 6, 2013For Securities:A

Summary

Agilent Technologies, Inc. reported a 4% decrease in net revenue to $1.65 billion for the third quarter of fiscal year 2013, compared to the same period last year. This decline was primarily driven by a significant 17% decrease in the Electronic Measurement segment, attributed to weak market conditions and the loss of a large customer. However, the Diagnostics and Genomics segment saw substantial growth, up 54%, largely due to the acquisition of Dako A/S. Net income for the quarter was $168 million, a decrease from $243 million in the prior year, impacted by factors including restructuring charges. The company continues to face macroeconomic challenges, particularly in the Electronic Measurement segment. Despite the overall revenue decline, Agilent maintained a stable gross margin and demonstrated operational resilience in its Life Sciences and Chemical Analysis segments, which experienced modest revenue growth. The company also generated $775 million in operating cash flow for the nine months ended July 31, 2013, indicating strong cash generation capabilities despite revenue headwinds.

Financial Highlights

57 data points
Beta

Revenue

$1.65B

51.8% Gross Margin

Net Income

$168.00M

10.2% Net Margin

EPS (Diluted)

$0.49

Total Assets

$10.28B

Cash & Equivalents

$2.33B

Free Cash Flow

$162.00M

Financial Statements
Beta
Revenue$1.65B
Cost of Revenue$796.00M
Gross Profit$856.00M
R&D Expenses$171.00M
SG&A Expenses$449.00M
Operating Expenses$1.42B
Operating Income$236.00M
Interest Expense$27.00M
Net Income$168.00M
EPS (Basic)$0.50
EPS (Diluted)$0.49
Shares Outstanding (Basic)339.00M
Shares Outstanding (Diluted)343.00M

Key Highlights

  • 1Net revenue for Q3 FY13 decreased by 4% to $1.65 billion compared to Q3 FY12.
  • 2Net income for Q3 FY13 was $168 million, down from $243 million in Q3 FY12.
  • 3The Diagnostics and Genomics segment experienced strong revenue growth of 54%, significantly boosted by the Dako A/S acquisition.
  • 4The Electronic Measurement segment saw a sharp revenue decline of 17%, attributed to market weakness and customer-specific issues.
  • 5Operating cash flow for the nine months ended July 31, 2013, was robust at $775 million.
  • 6The company initiated a restructuring program impacting approximately 700 employees to reduce costs.
  • 7Agilent repurchased $900 million of its common stock during the first nine months of FY13 as part of its enhanced share repurchase program.

Frequently Asked Questions

The decrease in revenue was primarily driven by a significant 17% decline in the Electronic Measurement segment, influenced by weak market conditions and the loss of a major customer. The overall revenue decline was partially offset by strong growth in the Diagnostics and Genomics segment, largely due to the Dako acquisition.

The acquisition of Dako A/S has been a significant growth driver, particularly for the Diagnostics and Genomics segment, which saw a 54% revenue increase in Q3 FY13. This acquisition contributed substantially to both orders and revenue in this segment.

Agilent attributes the weakness in the Electronic Measurement segment to general market conditions and specific customer losses. While the filing doesn't detail specific remediation actions beyond general cost controls, the company is investing in new products and longer-term growth drivers like mobility and computing for this segment. The company also announced a restructuring program impacting approximately 700 employees to improve cost efficiencies across the business.

Agilent generated strong operating cash flow of $775 million for the first nine months of FY13. The company continued its share repurchase program, buying back $900 million of its stock in the same period, and also paid cash dividends to shareholders, demonstrating a commitment to returning capital.