10-QPeriod: Q1 FY2018

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q1 Ended Jan 31, 2018

Filed March 6, 2018For Securities:A

Summary

Agilent Technologies reported strong top-line growth for the three months ended January 31, 2018, with total net revenue increasing by 14% year-over-year to $1.21 billion. This growth was driven by solid performance across all three segments: Life Sciences and Applied Markets (+14%), Diagnostics and Genomics (+13%), and Agilent CrossLab (+12%). The company's profitability, however, was significantly impacted by a one-time discrete tax charge of $533 million related to the enactment of the U.S. Tax Cuts and Jobs Act, resulting in a net loss of $320 million for the quarter, a stark contrast to the net income of $168 million reported in the prior year. Despite the net loss, operating cash flow showed a substantial improvement, increasing to $215 million from $116 million in the same period last year, indicating strong underlying operational cash generation.

Financial Highlights

58 data points
Beta

Revenue

$1.21B

55.3% Gross Margin

Net Income

-$320.00M

-26.4% Net Margin

EPS (Diluted)

$-0.99

Total Assets

$8.70B

Cash & Equivalents

$2.90B

Free Cash Flow

$155.00M

Financial Statements
Beta
Revenue$1.21B
Cost of Revenue$541.00M
Gross Profit$670.00M
R&D Expenses$94.00M
SG&A Expenses$347.00M
Operating Expenses$982.00M
Operating Income$229.00M
Interest Expense$20.00M
Net Income-$320.00M
EPS (Basic)$-0.99
EPS (Diluted)$-0.99
Shares Outstanding (Basic)323.00M
Shares Outstanding (Diluted)323.00M

Key Highlights

  • 1Total net revenue grew 14% to $1.21 billion, driven by robust performance in all three business segments.
  • 2Life Sciences and Applied Markets revenue increased 14%, Diagnostics and Genomics revenue rose 13%, and Agilent CrossLab revenue was up 12%.
  • 3A significant $533 million discrete tax charge related to the U.S. Tax Cuts and Jobs Act resulted in a net loss of $320 million for the quarter.
  • 4Net income for the prior year's comparable quarter was $168 million.
  • 5Operating cash flow more than doubled to $215 million from $116 million in the prior year's comparable quarter.
  • 6The company repurchased $47 million of its common stock under its share repurchase program during the quarter.
  • 7Agilent exercised its option to acquire the remaining shares of Lasergen, Inc. for $105 million, to be completed subsequent to the reporting period.

Frequently Asked Questions

The primary driver of the net loss of $320 million was a one-time discrete tax charge of $533 million related to the enactment of the U.S. Tax Cuts and Jobs Act (Tax Act) in December 2017. This charge included an estimated $480 million for the U.S. transition tax on deemed repatriated earnings of foreign subsidiaries and an estimated $53 million related to the impact of the decreased U.S. corporate tax rate.

Agilent demonstrated strong revenue growth, with total net revenue increasing by 14% to $1.21 billion for the three months ended January 31, 2018, compared to $1.07 billion in the same period last year. This growth was broad-based across all three segments: Life Sciences and Applied Markets (+14%), Diagnostics and Genomics (+13%), and Agilent CrossLab (+12%). Foreign currency movements had a favorable impact of approximately 4 percentage points on revenue.

Operating cash flow showed a significant improvement, rising to $215 million from $116 million in the prior year's comparable quarter. The company continued its capital return program by paying $48 million in cash dividends and repurchasing $47 million of its common stock under its authorized share repurchase program during the quarter. As of January 31, 2018, approximately $563 million remained authorized under the repurchase program.

Agilent exercised its option on February 23, 2018, to acquire all remaining shares of Lasergen, Inc. that it does not currently own for $105 million. The completion of this acquisition is subject to the execution of a merger agreement and the satisfaction of certain closing conditions.