01—Abstract
Summary
Summary of the 10-Q filed May 31, 2018. Cited figures are marked; the original filing is the authoritative source.
Agilent Technologies, Inc. reported solid revenue growth for the first six months of fiscal year 2018, with total net revenue increasing by 11% year-over-year to $2,417 milliona.
This growth was driven by strong performance across all three segments: Life Sciences and Applied Markets, Diagnostics and Genomics, and Agilent CrossLab. The company's profitability for the period was significantly impacted by a one-time discrete tax charge of $533 millionb related to the U.S. Tax Cuts and Jobs Act, resulting in a net loss of $115 million for the six months, compared to a net income of $332 million in the prior year. Excluding this tax impact, the company demonstrated operational strength and continued its focus on strategic acquisitions, with several key deals completed or announced in May 2018 to expand its market offerings.
Operationally, Agilent saw an increase in net income for the third quarter of fiscal 2018 to $205 millionc, up from $164 million in the same period last year, with diluted earnings per share at $0.63. The company continues to generate strong operating cash flow, amounting to $518 million for the first six months of fiscal 2018.
Agilent also remains committed to returning capital to shareholders through dividends and share repurchases, with $96 milliond in dividends paid and $93 million in share repurchases during the six-month period. The company's balance sheet remains robust with $3,011 million in cash and cash equivalents as of April 30, 2018.
02—Key points
Key Highlights
- Total net revenue increased by 11% year-over-year to $2,417 million for the six months ended April 30, 2018.
- Net income for the three months ended April 30, 2018, was $205 million, an increase from $164 million in the prior year.
- A significant $533 million discrete tax charge related to the U.S. Tax Cuts and Jobs Act resulted in a net loss of $115 million for the six months ended April 30, 2018.
- Operating cash flow was strong at $518 million for the six months ended April 30, 2018.
- Agilent completed or announced several strategic acquisitions in May 2018, including Lasergen, Genohm SA, and AATI, to enhance its product and service offerings.
- The company repurchased $93 million of its common stock and paid $96 million in dividends during the first six months of fiscal 2018, demonstrating commitment to shareholder returns.
- Cash and cash equivalents stood at $3,011 million as of April 30, 2018, providing ample liquidity.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2018, Agilent Technologies, Inc. kept $0.17.
- Revenue$1.21B100.0%
- Cost of revenue−$563.0M46.7%
- Gross profit$643.0M53.3%
- Operating costs−$433.0M35.9%
- Operating income$210.0M17.4%
- Interest, other & tax−$5.0M0.4%
- Net income$205.0M17.0%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2018filed May 31, 2018Financial Statements
Q2 FY2018 against Q2 FY2017
| Line item | Q2 FY2018Q2 FY2017 | Change |
|---|---|---|
| Revenue | $1.21B$1.10B | +9.4% |
| Cost of Revenue | $563.00M$510.00M | +10.4% |
| Gross Profit | $643.00M$592.00M | +8.6% |
| R&D Expenses | $92.00M$84.00M | +9.5% |
| SG&A Expenses | $341.00M$307.00M | +11.1% |
| Operating Expenses | $996.00M$901.00M | +10.5% |
| Operating Income | $210.00M$201.00M | +4.5% |
| Interest Expense | $19.00M$20.00M | −5.0% |
| Net Income | $205.00M$164.00M | +25.0% |
| EPS (Basic) | $0.64$0.51 | +25.5% |
| EPS (Diluted) | $0.63$0.50 | +26.0% |
| Shares Outstanding (Basic) | 322.00M321.00M | +0.3% |
| Shares Outstanding (Diluted) | 326.00M325.00M | +0.3% |
05—Questions
Frequently Asked Questions
What was the primary driver for the net loss in the first six months of fiscal 2018?
The primary driver for the net loss of $115 million in the first six months of fiscal 2018 was a significant one-time discrete tax charge of $533 million related to the enactment of the U.S. Tax Cuts and Jobs Act. This charge significantly impacted the company's profitability for the period.
How did Agilent's revenue perform in the reported period?
Agilent demonstrated strong revenue growth. For the six months ended April 30, 2018, total net revenue increased by 11% year-over-year to $2,417 million. All three reporting segments—Life Sciences and Applied Markets, Diagnostics and Genomics, and Agilent CrossLab—contributed to this growth, with revenue increases of 11%, 11%, and 12% respectively.
What is Agilent's strategy regarding acquisitions and capital allocation?
Agilent is actively pursuing strategic acquisitions to expand its capabilities, as evidenced by the completion or announcement of several acquisitions in May 2018, including Lasergen, Genohm SA, and Advanced Analytical Technologies, Inc. (AATI). The company also remains committed to returning capital to shareholders through a consistent dividend payment program and an active share repurchase program, demonstrating a balanced approach to growth and shareholder value.
What is the company's liquidity position?
Agilent maintains a strong liquidity position. As of April 30, 2018, the company reported $3,011 million in cash and cash equivalents. The company also generated $518 million in net cash from operating activities during the first six months of fiscal 2018, indicating robust operational cash generation.
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