|
|
SANTA CLARA , Calif., May 14, 2008
Agilent Technologies Inc. (NYSE: A) today reported orders of $1.52 billion for the second fiscal quarter ended April 30, 2008, 9 percent above one year ago. Revenues during the quarter were $1.46 billion, 10 percent above last year. Second quarter GAAP net income was $173 million, or $0.47 per diluted share. Last year's second quarter GAAP net income was $123 million, or $0.30 per share.
Included in this quarter's GAAP income is $19 million of share-based compensation expense. Excluding this item and $5 million of other net income, Agilent reported second quarter adjusted net income of $187 million, or $0.51 per share. On a comparable basis, the company earned $176 million, or $0.43 per share, one year ago. (1)
"Agilent had a solid fiscal second quarter, especially considering the difficult market conditions in much of the developed world," said Bill Sullivan, Agilent president and chief executive officer. "Revenues of $1.46 billion were up 10 percent from last year, at the high end of our expectations.
"Organic growth in the Americas was about 3 percent, and local currency revenues were about flat in Europe compared to last year. Growth in Asia Pacific was very robust, however, with revenues up 16 percent from one year ago.
"Segment trends were very similar to the first quarter, with Bio-Analytical revenues up 20 percent, or 13 percent excluding acquisitions, with robust growth in both life sciences and chemical analysis markets. Electronic Measurement revenues increased 5 percent, with good growth in communications test markets and modest growth in general purpose markets.
"Second quarter adjusted net income per share, at $0.51, was just above the top of our $0.46 - $0.50 guidance range, 19 percent ahead of one year ago."
Second quarter Return on Invested Capital (2) was 26 percent, one point above last year. Inventory Days-On-Hand was improved by 7 days from one year ago. Cash generated from operations during the quarter was $325 million. During the period, the company repurchased $263 million of its common stock.
Looking to the second half of fiscal 2008, Sullivan said the company's outlook was cautious but relatively unchanged. "We continue to anticipate tough conditions in U.S. markets and mixed conditions in Europe and Japan," said Sullivan, "while Asian markets are expected to remain quite robust."
Given these trends, Sullivan said the company expected fiscal third quarter revenues in the range of $1.44 billion to $1.49 billion, up 5 percent to 9 percent from last year. Third quarter adjusted net income per share is expected to be in the range of $0.52 to $0.56, 8 percent to 17 percent above one year ago. (3)
For the fiscal fourth quarter, revenues are expected to be in the range of $1.53 billion to $1.59 billion, up 6 percent to 10 percent from last year. Fourth quarter adjusted net income per share is expected to be in the range of $0.62 to $0.66 per share, 17 percent to 25 percent above last year's comparable earnings. (3)
For full fiscal year 2008, revenues are expected to be in the range of $5.82 billion to $5.93 billion, up 7 percent to 9 percent from 2007. Fiscal 2008 adjusted net income per share is expected to be in the range of $2.07 to $2.15 per share, 14 percent to 18 percent above 2007 results. (3)
Segment Results
| Bio-Analytical Measurement |
| ($ millions except where noted) |
Q2:F08 |
Q1:F08 |
Q2:F07 |
 Orders |
596 |
558 |
491 |
| Revenues |
556 |
557 |
463 |
| Gross
Margin, % |
54% |
54% |
53% |
| Income
from Operations |
92 |
102 |
76 |
| Segment
Assets |
1,476 |
1,431 |
1,050 |
| Return
On Invested Capital(2), % |
23% |
27% |
28% |
Bio-Analytical Measurement orders were up 21 percent during the second quarter from one year ago, the eighth consecutive double-digit advance, and up 14 percent excluding the impact of the Stratagene and Velocity 11 acquisitions. Revenue of $556 million was up 20 percent from last year, and up 13 percent on an organic basis. Revenues were up double-digit percentages in both Life Sciences and Chemical Analysis, and in all geographic regions. Asia was particularly strong, up 32 percent from one year ago.
Life Sciences revenue of $259 million was up 33 percent from one year ago, and up 16 percent organically. Pharma and Biotech markets were up 24 percent, or 11 percent excluding acquisitions, with modest growth in the U.S. and Europe and a strong performance from Asia. Sales to the academic and government markets jumped 74 percent above last year, and were up 36 percent organically. Chemical Analysis revenue of $297 million was up 11 percent from last year, with weakness in semiconductor-related materials science markets tempering what otherwise would have been 16 percent growth in Chemical Analysis revenues. Demand from petrochemicals was very strong, up 27 percent, and food safety was 19 percent ahead of one year ago.
Segment income from operations of $92 million was $16 million above last year on a $93 million increase in revenues. Adjusting for the impact of acquisitions, the segment generated a $21 million improvement in income on a $60 million increase in revenues. Operating margins were about unchanged from last year, at 17 percent. Segment Return On Invested Capital (2) dropped 5 points to 23 percent, with all of the decline due to acquisition-related costs and increased invested capital.
| Electronic Measurement |
| ($ millions except where noted) |
Q2:F08 |
Q1:F08 |
Q2:F07 |
Orders
|
928 |
843 |
909 |
| Revenues |
900 |
836 |
857 |
| Gross
Margin, % |
58% |
57% |
59% |
| Income
from Operations |
140 |
95 |
121 |
| Segment
Assets |
2,121 |
2,038 |
2,127 |
| Return
On Invested Capital(2), % |
28% |
20% |
24% |
Second quarter Electronic Measurement orders of $928 million were 2 percent above last year. Revenues of $900 million were up 5 percent, with the Americas and Europe both up 1 percent and Asia 11 percent ahead of one year ago. General Purpose Test revenues were 2 percent above last year, with sustained strength in aerospace / defense and moderate growth in electronic manufacturing partially offset by continued weakness in semiconductors. Communications Test revenues were up 11 percent, with sustained strength in R&D markets for LTE and WiMAX(tm) applications and a continuing rebound in handset manufacturing test. Broadband R&D was also strong, while network monitoring stabilized after several quarters of decline.
Second quarter segment income from operations of $140 million was up $19 million from last year on a $43 million increase in revenues. Gross margins were a half point below last year but tight control of operating expenses produced an operating margin 1½ points above one year ago. Higher profitability and aggressive asset management enabled segment ROIC (2) to improve 4 points to 28 percent.
About Agilent Technologies
Agilent Technologies Inc. (NYSE: A) is the world's premier measurement company and a technology leader in communications, electronics, life sciences and chemical analysis. The company's 19,000 employees serve customers in more than 110 countries. Agilent had net revenues of $5.4 billion in fiscal 2007. Information about Agilent is available on the Web at www.agilent.com.
Agilent's management will present more details on its second quarter FY2008 financial results on a conference call with investors beginning today at 1:30 p.m. (Pacific). This event will be webcast live in listen-only mode. Listeners may log on at www.investor.agilent.com and select "Q2 2008 Agilent Technologies Inc. Earnings Conference Call" in the "News & Events -- Calendar of Events" section. The webcast will remain available on the company's Web site for 90 days.
A telephone replay of the conference call will be available from 3:30 p.m. (Pacific) today through May 21, 2008. The replay number is +1 888 286-8010 or international callers may dial +1 617-801-6888. The passcode is 27291806.
Forward-Looking Statements
This news release contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The forward-looking statements contained herein include, but are not limited to, information regarding Agilent's future revenues, earnings and profitability; the pace of new product introductions and future demand for the Company's products and services; and guidance for the third and fourth quarters and for the full fiscal year 2008. These forward-looking statements involve risks and uncertainties that could cause Agilent's results to differ materially from management's current expectations. Such risks and uncertainties include, but are not limited to, unforeseen changes in the strength of our customers' businesses, and unforeseen changes in the demand for current and new products and technologies.
In addition, other risks that Agilent faces in running its operations include the ability to execute successfully through business cycles while it continues to implement cost reductions; the ability to meet and achieve the benefits of its cost-reduction goals and otherwise successfully adapt its cost structures to continuing changes in business conditions; ongoing competitive, pricing and gross-margin pressures; the risk that our cost-cutting initiatives will impair our ability to develop products and remain competitive and to operate effectively; the impact of geopolitical uncertainties on our operations, our markets and our ability to conduct business; the ability to improve asset performance to adapt to changes in demand; the ability to successfully introduce new products at the right time, price and mix; and other risks detailed in Agilent's filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the fiscal quarter ended Jan. 31, 2008. Forward-looking statements are based on the beliefs and assumptions of Agilent's management and on currently available information. Agilent undertakes no responsibility to publicly update or revise any forward-looking statement.
# # #
(1) Adjusted net income and adjusted net income per share are non-GAAP measures. Each of these measures is defined to exclude primarily the impacts of restructuring and asset impairment charges, business separation costs, non-cash share-based compensation, intangible amortization as well as gains and losses from the sale of investments and disposals of businesses net of their tax effects. A reconciliation between adjusted net income and GAAP net income is set forth on page 5 of the attached tables along with additional information regarding the use of this non-GAAP measure.
(2) Return On Invested Capital is a non-GAAP measure and is defined as income (loss) from operations less other (income) expense and taxes, annualized, divided by the average of the two most recent quarter-end balances of assets less net current liabilities. The reconciliation of ROIC can be found on page 6 of the attached tables, along with additional information regarding the use of this non-GAAP measure.
(3) Adjusted net income per share as projected for Q308, Q408 and full year 2008 is a non-GAAP measure which excludes primarily the impacts of future restructuring and asset impairment charges, non-cash share-based compensation, and intangibles amortization. Most of these excluded amounts pertain to events that have not yet occurred and are not currently possible to estimate with a reasonable degree of accuracy. Therefore, no reconciliation to GAAP amounts has been provided. Future amortization of intangibles is expected to be approximately $13 million per quarter.
"WiMAX," "Fixed WiMAX," "Mobile WiMAX," "WiMAX Forum," the WiMAX Forum logo, "WiMAX Forum Certified," and the WiMAX Forum Certified logo are trademarks of the WiMAX Forum. All other trademarks are the properties of their respective owners.
Financial Statements for Second Quarter Fiscal 2008
|
AGILENT TECHNOLOGIES, INC.
|
|
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
|
|
(In millions, except per share amounts)
|
|
(Unaudited)
|
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
April 30,
|
|
Percent
|
|
|
|
|
2008
|
|
|
|
2007
|
|
|
Inc/(Dec)
|
|
|
|
|
|
|
|
|
|
Orders
|
|
$
|
1,524
|
|
|
$
|
1,400
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
1,456
|
|
|
$
|
1,320
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
Cost of products and services
|
|
|
649
|
|
|
|
590
|
|
|
10
|
%
|
|
Research and development
|
|
|
183
|
|
|
|
173
|
|
|
6
|
%
|
|
Selling, general and administrative
|
|
|
433
|
|
|
|
426
|
|
|
2
|
%
|
|
Total costs and expenses
|
|
|
1,265
|
|
|
|
1,189
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
191
|
|
|
|
131
|
|
|
46
|
%
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
27
|
|
|
|
44
|
|
|
(39
|
%)
|
|
Interest expense
|
|
|
(29
|
)
|
|
|
(22
|
)
|
|
32
|
%
|
|
Other income (expense), net
|
|
|
7
|
|
|
|
3
|
|
|
133
|
%
|
|
|
|
|
|
|
|
|
|
Income from operations before taxes
|
|
|
196
|
|
|
|
156
|
|
|
26
|
%
|
|
|
|
|
|
|
|
|
|
Provision for taxes
|
|
|
23
|
|
|
|
33
|
|
|
(30
|
%)
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
173
|
|
|
$
|
123
|
|
|
41
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
Basic net income per share
|
|
$
|
0.48
|
|
|
$
|
0.31
|
|
|
|
|
Diluted net income per share
|
|
$
|
0.47
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income per share:
|
|
|
|
|
|
|
|
Basic
|
|
|
363
|
|
|
|
402
|
|
|
|
|
Diluted
|
|
|
370
|
|
|
|
413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations for the second quarter of fiscal years 2008
and 2007 include pre-tax share-based compensation expense under
SFAS No. 123(R) of $19 million and $40 million, respectively.
|
|
|
|
|
|
|
|
|
|
The preliminary income statement is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 1
|
|
AGILENT TECHNOLOGIES, INC.
|
|
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
|
|
(In millions, except per share amounts)
|
|
(Unaudited)
|
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
April 30,
|
|
Percent
|
|
|
|
|
2008
|
|
|
|
2007
|
|
|
Inc/(Dec)
|
|
|
|
|
|
|
|
|
|
Orders
|
|
$
|
2,925
|
|
|
$
|
2,650
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
2,849
|
|
|
$
|
2,600
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
Cost of products and services
|
|
|
1,286
|
|
|
|
1,179
|
|
|
9
|
%
|
|
Research and development
|
|
|
364
|
|
|
|
341
|
|
|
7
|
%
|
|
Selling, general and administrative
|
|
|
874
|
|
|
|
854
|
|
|
2
|
%
|
|
Total costs and expenses
|
|
|
2,524
|
|
|
|
2,374
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
325
|
|
|
|
226
|
|
|
44
|
%
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
66
|
|
|
|
94
|
|
|
(30
|
%)
|
|
Interest expense
|
|
|
(59
|
)
|
|
|
(45
|
)
|
|
31
|
%
|
|
Other income (expense), net
|
|
|
11
|
|
|
|
4
|
|
|
175
|
%
|
|
|
|
|
|
|
|
|
|
Income from operations before taxes
|
|
|
343
|
|
|
|
279
|
|
|
23
|
%
|
|
|
|
|
|
|
|
|
|
Provision for taxes
|
|
|
50
|
|
|
|
6
|
|
|
733
|
%
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
293
|
|
|
$
|
273
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
Basic net income per share
|
|
$
|
0.80
|
|
|
$
|
0.67
|
|
|
|
|
Diluted net income per share
|
|
$
|
0.78
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income per share:
|
|
|
|
|
|
|
|
Basic
|
|
|
367
|
|
|
|
405
|
|
|
|
|
Diluted
|
|
|
376
|
|
|
|
416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations for the first six months of fiscal years
2008 and 2007 include pre-tax share-based compensation expense
under SFAS No. 123(R) of $49 million and $76 million, respectively.
|
|
|
|
|
|
|
|
|
|
The preliminary income statement is estimated based on our current
information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 2
|
|
AGILENT TECHNOLOGIES, INC.
|
|
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
(In millions, except par value and share amounts)
|
|
(Unaudited)
|
|
PRELIMINARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30,
|
|
October 31,
|
|
|
|
|
|
|
|
2008
|
|
|
|
2007
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,710
|
|
|
$
|
1,826
|
|
|
|
Short-term investments
|
|
|
31
|
|
|
|
-
|
|
|
|
Accounts receivable, net
|
|
|
791
|
|
|
|
735
|
|
|
|
Inventory
|
|
|
674
|
|
|
|
643
|
|
|
|
Restricted cash and cash equivalents
|
|
|
1,572
|
|
|
|
-
|
|
|
|
Other current assets
|
|
|
407
|
|
|
|
467
|
|
|
|
|
Total current assets
|
|
|
5,185
|
|
|
|
3,671
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
809
|
|
|
|
801
|
|
|
Goodwill
|
|
|
630
|
|
|
|
558
|
|
|
Other intangible assets, net
|
|
|
237
|
|
|
|
178
|
|
|
Restricted cash and cash equivalents
|
|
|
12
|
|
|
|
1,615
|
|
|
Other assets
|
|
|
801
|
|
|
|
731
|
|
|
|
|
|
Total assets
|
|
$
|
7,674
|
|
|
$
|
7,554
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
312
|
|
|
$
|
323
|
|
|
|
Employee compensation and benefits
|
|
|
433
|
|
|
|
432
|
|
|
|
Deferred revenue
|
|
|
321
|
|
|
|
249
|
|
|
|
Income and other taxes payable
|
|
|
106
|
|
|
|
522
|
|
|
|
Short-term debt
|
|
|
1,752
|
|
|
|
-
|
|
|
|
Other accrued liabilities
|
|
|
120
|
|
|
|
137
|
|
|
|
|
Total current liabilities
|
|
|
3,044
|
|
|
|
1,663
|
|
|
|
|
|
|
| |
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