10-QPeriod: Q2 FY2020

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q2 Ended Apr 30, 2020

Filed June 1, 2020For Securities:A

Summary

Agilent Technologies, Inc. reported flat total net revenue of $1,238 million for the three months ended April 30, 2020, compared to the same period in the prior year. For the six months ended April 30, 2020, total net revenue increased by 3% to $2,595 million. The company noted that COVID-19 impacted revenue, particularly in the latter part of the second quarter, due to installation delays and laboratory closures. Net income for the three months ended April 30, 2020, decreased to $101 million ($0.32 diluted EPS) from $182 million ($0.57 diluted EPS) in the prior year. The six-month net income also saw a significant decline to $298 million ($0.95 diluted EPS) from $686 million ($2.13 diluted EPS), primarily due to a large discrete tax benefit in the prior year related to a Singapore tax incentive. Despite the challenging environment, Agilent maintained a solid operating margin and continued to manage its capital allocation through dividends and stock repurchases, although repurchases were suspended in March 2020 due to COVID-19.

Financial Highlights

55 data points
Beta

Revenue

$1.24B

53.1% Gross Margin

Net Income

$101.00M

8.2% Net Margin

EPS (Diluted)

$0.32

Total Assets

$9.46B

Cash & Equivalents

$1.33B

Free Cash Flow

$280.00M

Financial Statements
Beta
Revenue$1.24B
Cost of Revenue$581.00M
Gross Profit$657.00M
R&D Expenses$197.00M
SG&A Expenses$358.00M
Operating Expenses$1.14B
Operating Income$102.00M
Interest Expense$20.00M
Net Income$101.00M
EPS (Basic)$0.33
EPS (Diluted)$0.32
Shares Outstanding (Basic)309.00M
Shares Outstanding (Diluted)312.00M

Key Highlights

  • 1Total net revenue remained flat year-over-year for the three months ended April 30, 2020, at $1.238 billion, but increased 3% to $2.595 billion for the six-month period.
  • 2Net income for the quarter significantly decreased to $101 million, down from $182 million in the prior year, impacted by the COVID-19 pandemic and other factors.
  • 3Diluted EPS for the quarter was $0.32, down from $0.57 in the prior year's quarter.
  • 4The company highlighted the impact of the COVID-19 pandemic, leading to installation delays and laboratory closures, affecting revenue recognition in the second quarter.
  • 5Cash provided by operating activities for the six months was $254 million, a decrease from $465 million in the prior year, partly due to a one-time tax outflow related to intangibles transfer.
  • 6Agilent's stock repurchase program was suspended in March 2020 due to the COVID-19 pandemic, though $841 million remained authorized.
  • 7Gross margin decreased slightly year-over-year for both the three-month and six-month periods, reflecting pricing pressures, lower volume, and increased fixed costs.

Frequently Asked Questions

For the three months ended April 30, 2020, Agilent reported total net revenue of $1,238 million, which was relatively flat compared to the same period in the prior year. For the six months ended April 30, 2020, total net revenue increased by 3% to $2,595 million compared to the prior year period.

Net income for the three months ended April 30, 2020, was $101 million, resulting in a diluted EPS of $0.32. This is a decrease from the $182 million net income and $0.57 diluted EPS reported for the same period in the prior year.

Agilent noted that the COVID-19 pandemic significantly impacted its business. Revenue was affected by delays in installations and laboratory closures, particularly in the latter part of the second quarter. The company has implemented cost-saving measures, such as reductions in travel and non-essential spending, and suspended stock repurchases in response to the uncertainty.

Agilent had cash and cash equivalents of $1,324 million as of April 30, 2020. The company paid cash dividends totaling $111 million for the six-month period. Agilent had previously suspended its stock repurchase program in March 2020 due to the pandemic but still had $841 million authorized. The company also has access to a $1 billion unsecured credit facility, with $200 million outstanding as of April 30, 2020.