01—Abstract
Summary
Summary of the 10-Q filed September 1, 2020. Cited figures are marked; the original filing is the authoritative source.
Agilent Technologies, Inc. reported net revenue of $1,261 milliona 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 millionb ($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.
02—Key points
Key Highlights
- Q3 FY2020 net revenue of $1,261 million, down 1% year-over-year, with nine-month revenue up 2% to $3,856 million.
- Life Sciences and Applied Markets segment showed resilience with 2% revenue growth in both the quarter and nine months.
- Diagnostics and Genomics segment revenue declined 8% in Q3 FY2020, impacted by COVID-19 related disruptions to routine and cancer testing.
- Net income for Q3 FY2020 was $199 million ($0.64/share), up from $191 million in Q3 FY2019.
- Nine-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.
- The company resumed its share repurchase program in Q3 FY2020, repurchasing $33 million worth of stock.
- Agilent is managing the impact of COVID-19, noting sequential improvements in some markets and demand for COVID-19 related products.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2020, Agilent Technologies, Inc. kept $0.16.
- Revenue$1.26B100.0%
- Cost of revenue−$592.0M46.9%
- Gross profit$669.0M53.1%
- Operating costs−$439.0M34.8%
- Operating income$230.0M18.2%
- Interest, other & tax−$31.0M2.5%
- Net income$199.0M15.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2020filed September 1, 2020Financial Statements
Q3 FY2020 against Q3 FY2019
| Line item | Q3 FY2020Q3 FY2019 | Change |
|---|---|---|
| Revenue | $1.26B$1.27B | −1.0% |
| Cost of Revenue | $592.00M$582.00M | +1.7% |
| Gross Profit | $669.00M$692.00M | −3.3% |
| R&D Expenses | $92.00M$101.00M | −8.9% |
| SG&A Expenses | $347.00M$366.00M | −5.2% |
| Operating Expenses | $1.03B$1.05B | −1.7% |
| Operating Income | $230.00M$225.00M | +2.2% |
| Interest Expense | $19.00M$18.00M | +5.6% |
| Net Income | $199.00M$191.00M | +4.2% |
| EPS (Basic) | $0.64$0.61 | +4.9% |
| EPS (Diluted) | $0.64$0.60 | +6.7% |
| Shares Outstanding (Basic) | 309.00M312.00M | −1.0% |
| Shares Outstanding (Diluted) | 312.00M316.00M | −1.3% |
05—Questions
Frequently Asked Questions
How did Agilent's revenue perform in the third quarter of FY2020, and what were the main drivers?
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.
What was the net income and earnings per share for the quarter?
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.
How is the COVID-19 pandemic affecting Agilent's business, and what is the company doing to mitigate the impact?
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.
What is the company's stance on capital allocation, specifically regarding share repurchases and dividends?
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.
06—Continue