01—Abstract
Summary
Summary of the 10-Q filed March 2, 2021. Cited figures are marked; the original filing is the authoritative source.
Agilent Technologies, Inc. reported strong financial results for the third quarter of fiscal year 2021, showcasing significant year-over-year growth in both revenue and net income.
Total net revenue increased by 14% to $1,548 milliona, driven by robust performance across all three business segments: Life Sciences and Applied Markets, Diagnostics and Genomics, and Agilent CrossLab. Net income also saw a substantial jump to $288 million from $197 million in the prior year's comparable quarter. The company highlighted increased demand for products related to COVID-19 testing and research, alongside a steady recovery in other end markets.
Financially, the company demonstrated improved operational efficiency with a 5 percentage point increase in operating margin to 21.2%. Cash flow from operations significantly improved, turning positive at $238 millionb compared to a use of $59 million in the prior year, partly due to a one-time tax outflow in the previous period.
Agilent continued its capital allocation strategy through significant share repurchases totaling $344 millionc during the quarter, alongside regular dividend payments. Looking ahead, Agilent expressed optimism about continued improvement in financial results despite ongoing uncertainties related to the COVID-19 pandemic.
02—Key points
Key Highlights
- Total net revenue increased by 14% to $1,548 million compared to the prior year's quarter.
- Net income rose significantly to $288 million from $197 million in the same period last year.
- Operating margin expanded by 5 percentage points to 21.2%, indicating improved profitability.
- All three business segments (Life Sciences and Applied Markets, Diagnostics and Genomics, Agilent CrossLab) reported revenue growth.
- Net cash provided by operating activities improved dramatically to $238 million from a $59 million outflow.
- Agilent repurchased $344 million of its common stock during the quarter.
- The company announced a subsequent agreement to acquire Resolution Bioscience, Inc. for $550 million plus potential contingent payments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2021, Agilent Technologies, Inc. kept $0.19.
- Revenue$1.55B100.0%
- Cost of revenue−$710.0M45.9%
- Gross profit$838.0M54.1%
- Operating costs−$510.0M32.9%
- Operating income$328.0M21.2%
- Interest, other & tax−$40.0M2.6%
- Net income$288.0M18.6%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2021filed March 2, 2021Financial Statements
Q1 FY2021 against Q1 FY2020
| Line item | Q1 FY2021Q1 FY2020 | Change |
|---|---|---|
| Revenue | $1.55B$1.36B | +14.1% |
| Cost of Revenue | $710.00M$634.00M | +12.0% |
| Gross Profit | $838.00M$723.00M | +15.9% |
| R&D Expenses | $103.00M$104.00M | −1.0% |
| SG&A Expenses | $407.00M$404.00M | +0.7% |
| Operating Expenses | $1.22B$1.14B | +6.8% |
| Operating Income | $328.00M$215.00M | +52.6% |
| Interest Expense | $19.00M$20.00M | −5.0% |
| Net Income | $288.00M$197.00M | +46.2% |
| EPS (Basic) | $0.94$0.64 | +46.9% |
| EPS (Diluted) | $0.93$0.63 | +47.6% |
| Shares Outstanding (Basic) | 306.00M310.00M | −1.3% |
| Shares Outstanding (Diluted) | 309.00M313.00M | −1.3% |
05—Questions
Frequently Asked Questions
What drove the significant revenue growth in the third quarter?
Revenue growth was driven by broad-based increases across all three business segments: Life Sciences and Applied Markets, Diagnostics and Genomics, and Agilent CrossLab. This growth was supported by increased demand for products used in COVID-19 testing and research, as well as the resumption of elective medical procedures and other testing. Key end markets like pharmaceutical, food, and diagnostics also contributed positively.
How did Agilent's profitability change compared to the previous year?
Agilent demonstrated improved profitability with operating margin increasing by 5 percentage points to 21.2% for the three months ended January 31, 2021. This improvement was attributed to higher sales volume and increased gross margin, which more than offset slight increases in operating expenses. Net income also rose substantially to $288 million.
What is the company's financial health regarding cash flow and debt?
The company's liquidity position appears strong. Net cash provided by operating activities significantly improved to $238 million, a substantial increase from the $59 million outflow in the prior year's comparable quarter. As of January 31, 2021, Agilent had $1,329 million in cash and cash equivalents. Long-term debt stood at $2,185 million, with a partial redemption of $100 million in 2022 Senior Notes occurring during the quarter. The company also has access to a $1 billion unsecured credit facility and a $1 billion commercial paper program.
Are there any significant acquisitions or divestitures planned?
Subsequent to the reporting period, on March 1, 2021, Agilent signed an agreement to acquire privately-owned Resolution Bioscience, Inc. for $550 million in cash plus potential future contingent payments of up to $145 million. This acquisition, focused on next-generation sequencing liquid biopsy cancer diagnostics, is expected to close in the second fiscal quarter of 2021, subject to regulatory approval and customary closing conditions.
06—Continue