10-QPeriod: Q3 FY2020

AGILENT TECHNOLOGIES, INC. Quarterly Report for Q3 Ended Jul 31, 2020

Filed September 1, 2020For Securities:A

Summary

Agilent Technologies, Inc. reported net revenue of $1,261 million for the third quarter of fiscal year 2020, a slight decrease of 1% compared to the prior year, while nine-month revenue increased 2% to $3,856 million. The company experienced mixed performance across its segments, with Life Sciences and Applied Markets showing a 2% increase in revenue for both periods, while Diagnostics and Genomics saw an 8% decline in the quarter. Agilent CrossLab revenue decreased slightly in the quarter but grew 1% over nine months. Net income for the quarter was $199 million ($0.64 per diluted share), an improvement from $191 million in the prior year, but nine-month net income was significantly impacted by a large tax benefit in the prior year, resulting in $497 million for the current period versus $877 million in the prior year. The company navigated the ongoing COVID-19 pandemic, which affected customer access and demand in certain markets. Despite these challenges, Agilent saw improvements in China and experienced demand for products related to COVID-19 testing and vaccine research. Management highlighted cost-saving measures and maintained a focus on operational efficiency. The company also resumed its share repurchase program in the third quarter after a temporary suspension.

Financial Highlights

55 data points
Beta

Revenue

$1.26B

53.1% Gross Margin

Net Income

$199.00M

15.8% Net Margin

EPS (Diluted)

$0.64

Total Assets

$9.55B

Cash & Equivalents

$1.36B

Free Cash Flow

$265.00M

Financial Statements
Beta
Revenue$1.26B
Cost of Revenue$592.00M
Gross Profit$669.00M
R&D Expenses$92.00M
SG&A Expenses$347.00M
Operating Expenses$1.03B
Operating Income$230.00M
Interest Expense$19.00M
Net Income$199.00M
EPS (Basic)$0.64
EPS (Diluted)$0.64
Shares Outstanding (Basic)309.00M
Shares Outstanding (Diluted)312.00M

Key Highlights

  • 1Q3 FY2020 net revenue of $1,261 million, down 1% year-over-year, with nine-month revenue up 2% to $3,856 million.
  • 2Life Sciences and Applied Markets segment showed resilience with 2% revenue growth in both the quarter and nine months.
  • 3Diagnostics and Genomics segment revenue declined 8% in Q3 FY2020, impacted by COVID-19 related disruptions to routine and cancer testing.
  • 4Net income for Q3 FY2020 was $199 million ($0.64/share), up from $191 million in Q3 FY2019.
  • 5Nine-month net income of $497 million was significantly lower than $877 million in the prior year, primarily due to a large discrete tax benefit in FY2019.
  • 6The company resumed its share repurchase program in Q3 FY2020, repurchasing $33 million worth of stock.
  • 7Agilent is managing the impact of COVID-19, noting sequential improvements in some markets and demand for COVID-19 related products.

Frequently Asked Questions

Agilent reported net revenue of $1,261 million for the third quarter of fiscal year 2020, a slight decrease of 1% compared to the prior year. Revenue from the Life Sciences and Applied Markets segment increased by 2%, while the Diagnostics and Genomics segment saw an 8% decline due to COVID-19 related impacts on testing and research. The Agilent CrossLab segment experienced a 1% decrease in revenue.

For the three months ended July 31, 2020, Agilent reported net income of $199 million, or $0.64 per diluted share, compared to $191 million, or $0.60 per diluted share, for the same period in the prior year. This represents an increase in net income and a slight improvement in per-share earnings.

The COVID-19 pandemic has impacted Agilent's business through disruptions in customer access to laboratories, affecting installations and service, and leading to reduced demand in certain markets like academia and government. However, the company has also seen demand for its products used in COVID-19 testing and vaccine research, and noted sequential improvements in markets like China as economies reopened. Agilent has implemented cost-saving measures, such as reductions in travel and non-essential spending, and is leveraging digital tools for customer engagement.

Agilent resumed its share repurchase program in the third quarter of fiscal year 2020, repurchasing approximately $33 million of its common stock. The company also continued to pay cash dividends, distributing $167 million for the first nine months of fiscal year 2020. As of July 31, 2020, there was $808 million remaining under its share repurchase authorization.