01—Abstract
Summary
Summary of the 10-Q filed September 2, 2015. Cited figures are marked; the original filing is the authoritative source.
Agilent Technologies, Inc. reported steady performance for the third quarter and first nine months of fiscal year 2015, with net revenue reaching $1,014 milliona 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.
02—Key points
Key Highlights
- Net revenue for Q3 FY2015 was $1.014 billion, a slight increase of 1% year-over-year.
- Net revenue for the first nine months of FY2015 was $3.003 billion, flat compared to the prior year.
- Foreign currency fluctuations had a notable unfavorable impact on revenue and orders, reducing revenue by approximately 6-7 percentage points for the nine-month period.
- The company has reorganized into three new reporting segments: Life Sciences and Applied Markets, Diagnostics and Genomics, and Agilent CrossLab.
- Agilent completed the acquisition of Cartagenia for €60 million, strengthening its position in clinical genetics and molecular pathology.
- Cash flow from operations for the first nine months of FY2015 was $254 million.
- The 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.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2015, Agilent Technologies, Inc. kept $0.11.
- Revenue$1.01B100.0%
- Cost of revenue−$501.0M49.4%
- Gross profit$513.0M50.6%
- Operating costs−$369.0M36.4%
- Operating income$144.0M14.2%
- Interest, other & tax−$33.0M3.3%
- Net income$111.0M10.9%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2015filed September 2, 2015Financial Statements
Q3 FY2015 against Q3 FY2014
| Line item | Q3 FY2015Q3 FY2014 | Change |
|---|---|---|
| Revenue | $1.01B$1.01B | +0.5% |
| Cost of Revenue | $501.00M$507.00M | −1.2% |
| Gross Profit | $513.00M$502.00M | +2.2% |
| R&D Expenses | $79.00M$86.00M | −8.1% |
| SG&A Expenses | $290.00M$285.00M | +1.8% |
| Operating Expenses | $870.00M$878.00M | −0.9% |
| Operating Income | $144.00M$131.00M | +9.9% |
| Interest Expense | $17.00M$28.00M | −39.3% |
| Net Income | $111.00M$147.00M | −24.5% |
| EPS (Basic) | $0.33$0.44 | −25.0% |
| EPS (Diluted) | $0.33$0.43 | −23.3% |
| Shares Outstanding (Basic) | 332.00M334.00M | −0.6% |
| Shares Outstanding (Diluted) | 334.00M338.00M | −1.2% |
05—Questions
Frequently Asked Questions
How did the Keysight separation impact the financial statements?
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.
What is the company's strategy for returning capital to shareholders?
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.
What are the primary segments of Agilent Technologies?
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.
What impact did foreign currency exchange rates have on the company's performance?
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.
06—Continue