10-QPeriod: Q3 FY2015

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q3 Ended Jul 31, 2015

Filed September 2, 2015For Securities:A

Summary

Agilent Technologies, Inc. reported steady performance for the third quarter and first nine months of fiscal year 2015, with net revenue reaching $1,014 million and $3,003 million respectively. While overall revenue was largely flat year-over-year, the company navigated challenges from foreign currency headwinds which unfavorably impacted revenue by approximately 6-7 percentage points. The separation of Keysight Technologies, Inc. in late 2014 has been completed, and its results are now reported under discontinued operations. Agilent has also reorganized into three new reporting segments: Life Sciences and Applied Markets, Diagnostics and Genomics, and Agilent CrossLab. The company announced an agreement to acquire Cartagenia for €60 million, bolstering its capabilities in clinical genetics and molecular pathology. Management is focused on organic growth and expanding operating margins, with plans to return significant cash flow to shareholders through dividends and share repurchases. The company's liquidity position remains strong, with substantial cash and cash equivalents, and confidence in its ability to meet its financial obligations.

Financial Highlights

56 data points
Beta

Revenue

$1.01B

50.6% Gross Margin

Net Income

$111.00M

10.9% Net Margin

EPS (Diluted)

$0.33

Total Assets

$7.25B

Cash & Equivalents

$2.08B

Free Cash Flow

$89.00M

Financial Statements
Beta
Revenue$1.01B
Cost of Revenue$501.00M
Gross Profit$513.00M
R&D Expenses$79.00M
SG&A Expenses$290.00M
Operating Expenses$870.00M
Operating Income$144.00M
Interest Expense$17.00M
Net Income$111.00M
EPS (Basic)$0.33
EPS (Diluted)$0.33
Shares Outstanding (Basic)332.00M
Shares Outstanding (Diluted)334.00M

Key Highlights

  • 1Net revenue for Q3 FY2015 was $1.014 billion, a slight increase of 1% year-over-year.
  • 2Net revenue for the first nine months of FY2015 was $3.003 billion, flat compared to the prior year.
  • 3Foreign currency fluctuations had a notable unfavorable impact on revenue and orders, reducing revenue by approximately 6-7 percentage points for the nine-month period.
  • 4The company has reorganized into three new reporting segments: Life Sciences and Applied Markets, Diagnostics and Genomics, and Agilent CrossLab.
  • 5Agilent completed the acquisition of Cartagenia for €60 million, strengthening its position in clinical genetics and molecular pathology.
  • 6Cash flow from operations for the first nine months of FY2015 was $254 million.
  • 7The company continues its commitment to returning capital to shareholders, paying $100 million in dividends and repurchasing $267 million of stock in the first nine months of FY2015.

Frequently Asked Questions

The historical results of operations and financial position of Keysight Technologies, Inc. have been presented as discontinued operations in the condensed consolidated financial statements. This means Keysight's financial performance is reported separately from Agilent's ongoing operations.

Agilent plans to return a significant proportion of its cash flow to shareholders through its dividend and share repurchase programs. The company paid $100 million in dividends and repurchased $267 million of its stock in the first nine months of fiscal year 2015, and has authorized a new, substantial share repurchase program.

Agilent has reorganized into three reportable business segments: Life Sciences and Applied Markets, Diagnostics and Genomics, and Agilent CrossLab. These segments are evaluated based on their performance and resource allocation by the chief operating decision maker.

Foreign currency movements, primarily due to the strength of the U.S. dollar, had an unfavorable impact on Agilent's results. For the nine months ended July 31, 2015, revenue was decreased by approximately 6 percentage points due to these movements. The company uses hedging strategies to mitigate some of this risk, but longer-term exposure remains.