01—Abstract
Summary
Summary of the 10-Q filed September 2, 2014. Cited figures are marked; the original filing is the authoritative source.
Agilent Technologies, Inc. reported its results for the third quarter and the first nine months of fiscal year 2014.
For the three months ended July 31, 2014, net revenue increased by 7% to $1.766 billiona compared to the prior year. Net income for the quarter was $147 million, a decrease from $168 million in the same period last year, resulting in diluted earnings per share of $0.43. For the nine months ended July 31, 2014, net revenue grew 2% to $5.176 billion, while net income decreased to $481 million from $513 million in the prior year, with diluted earnings per share of $1.42.
A significant event impacting the company is the planned separation of its electronic measurement business into a new entity named Keysight Technologies, Inc. This separation was expected to be completed in early November 2014. The company incurred pre-separation expenses of $123 millionb in the first nine months of fiscal 2014 related to this transaction. Agilent's core businesses are now focused on life sciences, diagnostics, and chemical analysis.
02—Key points
Key Highlights
- Total net revenue for the three months ended July 31, 2014, increased 7% year-over-year to $1.766 billion.
- Net income for the three months ended July 31, 2014, was $147 million, down from $168 million in the prior year, with diluted EPS of $0.43.
- The company is in the process of separating its electronic measurement business into a new entity, Keysight Technologies, Inc., expected to be completed in early November 2014.
- Pre-separation expenses of $123 million were incurred in the nine months ended July 31, 2014, related to the planned spin-off.
- Cash flow from operating activities for the nine months ended July 31, 2014, was $547 million, a decrease from $775 million in the prior year.
- The company repurchased $200 million of its shares in the nine months ended July 31, 2014, and paid $132 million in dividends.
- Total orders increased by 9% and 5% for the three and nine months ended July 31, 2014, respectively, compared to the prior year, with growth across all segments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2014, Agilent Technologies, Inc. kept $0.15.
- Revenue$1.01B100.0%
- Cost of revenue−$507.0M50.2%
- Gross profit$502.0M49.8%
- Operating costs−$371.0M36.8%
- Operating income$131.0M13.0%
- Interest, other & tax$16.0M1.6%
- Net income$147.0M14.6%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2014filed September 2, 2014Financial Statements
Q3 FY2014 against Q3 FY2013
| Line item | Q3 FY2014Q3 FY2013 | Change |
|---|---|---|
| Revenue | $1.01B$1.65B | −38.9% |
| Cost of Revenue | $507.00M$796.00M | −36.3% |
| Gross Profit | $502.00M$856.00M | −41.4% |
| R&D Expenses | $86.00M$171.00M | −49.7% |
| SG&A Expenses | $285.00M$449.00M | −36.5% |
| Operating Expenses | $878.00M$1.42B | −38.0% |
| Operating Income | $131.00M$236.00M | −44.5% |
| Interest Expense | $28.00M$27.00M | +3.7% |
| Net Income | $147.00M$168.00M | −12.5% |
| EPS (Basic) | $0.44$0.50 | −12.0% |
| EPS (Diluted) | $0.43$0.49 | −12.2% |
| Shares Outstanding (Basic) | 334.00M339.00M | −1.5% |
| Shares Outstanding (Diluted) | 338.00M343.00M | −1.5% |
05—Questions
Frequently Asked Questions
What is the main strategic event impacting Agilent Technologies in this filing period?
The most significant strategic event is the planned separation of Agilent's electronic measurement business into a new, independent company named Keysight Technologies, Inc. This separation was expected to be completed in early November 2014, shortly after the filing period. The company incurred substantial pre-separation expenses related to this transaction.
How did Agilent's revenue and profitability perform in the third quarter of fiscal year 2014 compared to the prior year?
For the three months ended July 31, 2014, Agilent's total net revenue increased by 7% to $1.766 billion. However, net income decreased to $147 million from $168 million in the prior year, resulting in a slight decline in diluted earnings per share to $0.43 from $0.49.
What is the financial health of Agilent regarding cash flow and debt?
Agilent generated $547 million in net cash from operating activities in the first nine months of fiscal year 2014, a decrease from $775 million in the same period last year. The company maintained a strong liquidity position with $2.391 billion in cash and cash equivalents as of July 31, 2014. They also continued to return capital to shareholders through $132 million in dividends and $200 million in share repurchases during the nine-month period. The company repaid its 2015 senior notes and had $2.095 billion in other senior notes outstanding.
How did the different business segments perform in terms of revenue and orders?
All three segments showed growth in orders for the nine-month period: Life Sciences and Diagnostics (5%), Chemical Analysis (6%), and Electronic Measurement (4%). Revenue growth varied, with Life Sciences and Diagnostics up 4%, Chemical Analysis up 5%, and Electronic Measurement down 1% for the nine months. The Life Sciences and Diagnostics segment saw particular strength in pharmaceutical and biotechnology markets, while Chemical Analysis benefited from food safety and environmental markets. Electronic Measurement revenue was mixed, with some strength in aerospace and defense but weakness in other areas.
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