10-QPeriod: Q2 FY2018

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q2 Ended Apr 30, 2018

Filed May 31, 2018For Securities:A

Summary

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 million. 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 million 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 million, 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 million 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.

Financial Statements
Beta
Revenue$1.21B
Cost of Revenue$563.00M
Gross Profit$643.00M
R&D Expenses$92.00M
SG&A Expenses$341.00M
Operating Expenses$996.00M
Operating Income$210.00M
Interest Expense$19.00M
Net Income$205.00M
EPS (Basic)$0.64
EPS (Diluted)$0.63
Shares Outstanding (Basic)322.00M
Shares Outstanding (Diluted)326.00M

Key Highlights

  • 1Total net revenue increased by 11% year-over-year to $2,417 million for the six months ended April 30, 2018.
  • 2Net income for the three months ended April 30, 2018, was $205 million, an increase from $164 million in the prior year.
  • 3A 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.
  • 4Operating cash flow was strong at $518 million for the six months ended April 30, 2018.
  • 5Agilent completed or announced several strategic acquisitions in May 2018, including Lasergen, Genohm SA, and AATI, to enhance its product and service offerings.
  • 6The 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.
  • 7Cash and cash equivalents stood at $3,011 million as of April 30, 2018, providing ample liquidity.

Frequently Asked Questions

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.

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.

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.

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.