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Agilent Q3 Revenues Increase 22 Percent, Life Sciences up 21 Percent

NEW YORK (GenomeWeb News) – Fiscal third-quarter revenues rose 22 percent year over year with its Life Sciences segment seeing 21 percent growth, Agilent Technologies reported after the close of the market on Monday.

For the three months ended July 31, total revenues came in at $1.69 billion, compared to $1.38 billion a year ago, beating analyst estimates of $1.66 billion. Orders for the quarter increased 13 percent to $1.69 billion from $1.49 billion a year ago.

Life Sciences posted $453 million in revenues, up from 374 million a year ago, with bookings of $445 million, a 14 percent increase from $391 million during the third quarter of 2010. In a conference call following the earnings release, Agilent CFO Didier Hirsch said that Life Sciences grew 18 percent organically year over year.

Agilent President and CEO William Sullivan noted on the call "solid growth" across all the company's segments in all regions with particular strength in China and the rest of Asia-Pacific. He added that though there remains market uncertainty over the US and European pharmaceutical sectors "we have good momentum driven by the replacement cycle in lab instrumentation."

All "key product platforms" and the service business saw double-digit growth year over year during the quarter, Sullivan said.

Nick Roelofs president Agilent's Life Sciences division, said in his segment, "We feel a lot of power in that replacement and technology upgrade cycle coming, so we're pretty comfortable with where pharma/biotech is on a global basis at the moment."

He added that while there has been nervousness among life science tools companies about the academic and government end markets, it makes up only 8 percent of Agilent's total business. Also, because Agilent did not benefit substantially from global stimulus funding, which is now reaching its end, "we're not too concerned about whatever inflection may be occurring on the stimulus" cycle, he said.

On the conference call Sullivan also signaled a possible shift in Agilent's M&A strategy. In the past, he has said that valuations of possible acquisition had been through the roof, particularly in the life sciences. Today, he said that the current environment may work in his company's favor to do a deal and said that if one were to transpire, Agilent would most likely do a cash deal or borrow money to fund it rather than issue shares of its stock.

The firm's Chemical Analysis division saw a 17 percent increase in revenues year over year to $383 million, while Electronic Measurement revenues grew 24 percent to $856 million.

Net income increased 61 percent to $330 million, or $.92 per share, from $205 million, or $.58 per share, a year ago.

During the quarter Agilent had intangible amortization of $29 million, acquisition and integration costs of $11 million, and restructuring and transformational charges of $13 million. It also recognized a tax benefit of $105 million. Excluding those items and $2 million of other net credits, adjusted EPS for the quarter was $.77, outpacing Wall Street forecasts for $.73.

The Santa Clara, Calif.-based company increased R&D spending 5 percent to $162 million during the quarter from $154 million a year ago, while it reduced SG&A costs about 2 percent to $449 million from $456 million.

For the fourth quarter, Agilent said that revenues are expected to be in the range of $1.74 billion and $1.76 billion. Non-GAAP EPS is anticipated in the range of $.79 and $.81.

The company raised full-year revenue 2011 guidance to between $6.64 billion and $6.66 billion and adjusted EPS guidance to between $2.90 and $2.92.

Agilent finished the quarter with $3.10 billion in cash and cash equivalents.

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