10-QPeriod: Q2 FY2019

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q2 Ended Apr 30, 2019

Filed May 30, 2019For Securities:A

Summary

Agilent Technologies, Inc. reported solid revenue growth for the six months ended April 30, 2019, with total net revenue increasing by 4% to $2,522 million compared to the prior year. This growth was driven by strong performance in the Diagnostics and Genomics segment (+9%) and Agilent CrossLab (+8%), while the Life Sciences and Applied Markets segment remained flat. The company's net income for the six months was significantly impacted by a discrete tax benefit of $299 million related to Singapore tax incentives, resulting in a net income of $686 million, a substantial improvement from the net loss of $115 million in the prior year's comparable period which was affected by the U.S. Tax Cuts and Jobs Act. Operationally, Agilent maintained stable gross margins and operating margins, indicating effective cost management. The company also demonstrated a commitment to returning capital to shareholders through $104 million in dividends paid and $125 million in share repurchases during the first six months of the fiscal year. Agilent's strong cash position and newly established $1 billion credit facility provide ample liquidity for ongoing operations and strategic initiatives.

Financial Statements
Beta
Revenue$1.24B
Cost of Revenue$569.00M
Gross Profit$669.00M
R&D Expenses$99.00M
SG&A Expenses$354.00M
Operating Expenses$1.02B
Operating Income$216.00M
Interest Expense$17.00M
Net Income$182.00M
EPS (Basic)$0.57
EPS (Diluted)$0.57
Shares Outstanding (Basic)317.00M
Shares Outstanding (Diluted)321.00M

Key Highlights

  • 1Total net revenue increased by 4% year-over-year for the six months ended April 30, 2019, reaching $2.52 billion.
  • 2The Diagnostics and Genomics segment showed strong growth with a 9% increase in revenue year-over-year for the first six months.
  • 3Agilent CrossLab segment revenue grew by 8% year-over-year for the first six months, driven by services and supplies.
  • 4Net income for the six months ended April 30, 2019 was $686 million, significantly boosted by a $299 million discrete tax benefit.
  • 5Operating margin remained stable at 18.5% for the six months ended April 30, 2019, indicating consistent operational performance.
  • 6The company returned $104 million to shareholders through dividends and $125 million through share repurchases in the first six months of fiscal 2019.
  • 7Agilent entered into a new $1 billion, five-year unsecured credit facility in March 2019, enhancing its liquidity position.

Frequently Asked Questions

The substantial increase in net income for the six months ended April 30, 2019, primarily resulted from a discrete tax benefit of $299 million related to the restructuring and extension of the company's tax incentive in Singapore. This significantly offset other operational results and the prior year's tax-related charges.

For the six months ended April 30, 2019, Agilent Technologies saw varying performance across its segments. The Diagnostics and Genomics segment grew by 9% year-over-year, and Agilent CrossLab grew by 8%. The Life Sciences and Applied Markets segment was flat year-over-year. Overall total net revenue increased by 4%.

Agilent Technologies demonstrated a commitment to capital allocation by paying $104 million in dividends and repurchasing $125 million of its common stock during the first six months of fiscal 2019. The company has a new $1.75 billion share repurchase program authorized and continues to pay quarterly dividends, subject to board approval.

Agilent Technologies maintained a strong liquidity position with $2.155 billion in cash and cash equivalents as of April 30, 2019. Furthermore, the company secured a new $1 billion, five-year unsecured credit facility in March 2019, replacing its previous facility, providing significant financial flexibility for its operations and strategic initiatives.