01—Abstract
Summary
Summary of the 10-Q filed March 5, 2014. Cited figures are marked; the original filing is the authoritative source.
Agilent Technologies, Inc. reported relatively flat net revenue of $1.679 billiona for the three months ended January 31, 2014, compared to $1.680 billion in the prior year's comparable period.
Despite this, net income saw an increase to $195 millionb from $179 million year-over-year, driven by a significant discrete tax benefit related to an IRS audit settlement. The company is actively engaged in a strategic separation of its electronic measurement business into a new entity, Keysight Technologies, Inc., expected to be completed by November 2014. Operational performance varied across segments.
The Life Sciences and Diagnostics business showed revenue growth of 5%c, while the Chemical Analysis segment grew by 6%. Conversely, the Electronic Measurement segment experienced a 7% decline in revenue, largely due to weakness in aerospace and defense markets.
The company continues to invest in Research and Development, maintaining its commitment to approximately 10% of revenues, with a focus on strategic opportunities. Agilent also repurchased $100 milliond of its stock during the quarter and paid $44 million in dividends, reflecting a commitment to returning value to shareholders.
02—Key points
Key Highlights
- Net revenue remained stable at $1.679 billion, demonstrating resilience in a challenging market.
- Net income increased by 8.9% to $195 million, significantly boosted by a $35 million discrete tax benefit from an IRS audit settlement.
- The company is on track for the planned separation of its Electronic Measurement business into Keysight Technologies, Inc., expected in early November 2014.
- Life Sciences & Diagnostics and Chemical Analysis segments showed positive revenue growth (5% and 6% respectively), indicating strength in core areas.
- The Electronic Measurement segment faced headwinds, with revenue declining 7%, influenced by reduced demand in aerospace and defense.
- Operating cash flow decreased to $194 million from $245 million in the prior year's quarter, warranting close monitoring.
- Agilent repurchased $100 million of its common stock, underscoring a focus on shareholder returns and managing share count dilution.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2014, Agilent Technologies, Inc. kept $0.19.
- Revenue$1.01B100.0%
- Cost of revenue−$498.0M49.4%
- Gross profit$510.0M50.6%
- Operating costs−$386.0M38.3%
- Operating income$124.0M12.3%
- Interest, other & tax$71.0M7.0%
- Net income$195.0M19.3%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2014filed March 5, 2014Financial Statements
Q1 FY2014 against Q1 FY2013
| Line item | Q1 FY2014Q1 FY2013 | Change |
|---|---|---|
| Revenue | $1.01B$1.68B | −40.0% |
| Cost of Revenue | $498.00M$800.00M | −37.7% |
| Gross Profit | $510.00M$880.00M | −42.0% |
| R&D Expenses | $88.00M$179.00M | −50.8% |
| SG&A Expenses | $298.00M$484.00M | −38.4% |
| Operating Expenses | $884.00M$1.46B | −39.6% |
| Operating Income | $124.00M$217.00M | −42.9% |
| Interest Expense | $29.00M$25.00M | +16.0% |
| Net Income | $195.00M$179.00M | +8.9% |
| EPS (Basic) | $0.59$0.52 | +13.5% |
| EPS (Diluted) | $0.58$0.51 | +13.7% |
| Shares Outstanding (Basic) | 333.00M347.00M | −4.0% |
| Shares Outstanding (Diluted) | 338.00M352.00M | −4.0% |
05—Questions
Frequently Asked Questions
What is the financial performance of Agilent Technologies for the quarter ending January 31, 2014?
For the quarter ended January 31, 2014, Agilent Technologies reported net revenue of $1.679 billion, which was flat compared to the same period in the prior year. Net income increased to $195 million from $179 million year-over-year. This increase was largely attributed to a significant discrete tax benefit of $35 million resulting from the settlement of an IRS audit.
What is the status of the planned separation of the Electronic Measurement business?
Agilent announced plans to separate its Electronic Measurement business into a new publicly traded company, Keysight Technologies, Inc. This separation is expected to be completed in early November 2014 through a tax-free pro rata distribution of Keysight shares to Agilent shareholders. The company is incurring pre-separation expenses, estimated at $140 million for fiscal year 2014.
How did the different business segments perform in terms of revenue?
Performance varied across segments. The Life Sciences and Diagnostics segment saw a 5% increase in revenue, driven by demand in pharmaceutical, biotechnology, and clinical markets. The Chemical Analysis segment also grew, with a 6% revenue increase, supported by strong performance in food safety and forensics. However, the Electronic Measurement segment experienced a 7% decline in revenue, primarily due to decreased demand in aerospace and defense markets.
What is Agilent's cash flow situation and how is it managing shareholder returns?
Net cash provided by operating activities was $194 million for the quarter, down from $245 million in the prior year. Agilent repurchased $100 million of its common stock during the quarter under its share repurchase program. The company also paid $44 million in cash dividends to common shareholders. Agilent has a new share repurchase program in place, designed to mitigate dilution from employee equity programs.
06—Continue