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Agilent Posts 31 Percent Revenue Growth

This article has been updated with comments from a conference call.

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Agilent Technologies reported after the close of the market Monday that its third-quarter revenues increased 31 percent, with double-digit growth across all of its segments.

The Santa Clara, Calif.-based firm brought in total revenues of $1.38 billion for the three-month period ended July 31, compared to $1.06 billion for the third quarter of 2009. The firm fell just short of analysts' consensus estimate of $1.4 billion for the quarter.

Its life science segment had 28 percent revenue growth, or 15 percent organically, to $374 million from $293 million year over year, while its chemical analysis segment had revenue growth of 62 percent, or 13 percent organically, to $329 million from $203 million.

Its electronic measurement business had 24 percent revenue growth to $692 million from $561 million. Revenues for the segment were up 34 percent, excluding the divestiture of its Network Solutions business.

The firm's revenues, particularly for the life sciences and chemical analysis segments, were partially helped by the firm's $1.5 billion acquisition of Varian in May.

"The Varian integration is going well, and we had excellent organic growth across all of our instrument platforms and geographies," Agilent President and CEO Bill Sullivan said in a statement.

Sullivan said during a conference call following the release of the results that within life sciences strength in emerging markets was offset by softness among big pharma accounts, which he attributed to consolidation.

"Sales of Life Science platforms into food, environmental and other applied markets remain very strong, particularly for the LC and LC/MS instruments," said Sullivan. "LC sales were up 25% year-over-year."

He also noted that Agilent's high-end mass spec business had an especially strong quarter.

Agilent posted net income of $205 million, or $.58 per share, compared to a net loss of $19 million, or $.06 per share, for Q2 2009. On an adjusted basis, its net income was $191 million, or $.54 per share, easily beating analysts' consensus estimate of $.48 per share.

During the quarter, Agilent reported net gains from divestitures of $123 million, Varian-related acquisition and integration costs of $83 million, intangible amortization of $28 million, and restructuring charges of $6 million. Its results in Q3 2009 had been hit by restructuring and asset impairment charges of $81 million and $11 million of non-cash amortization.

The firm's R&D spending for the quarter increased 1 percent to $154 million from $153 million, while its SG&A spending increased 18 percent to $456 million from $387 million.

Agilent finished the quarter with $2.32 billion in cash and cash equivalents, as well as $1.56 billion in short-term restricted cash and cash equivalents.

The firm is not expected to use its cash for a big acquisition in the near-term, though, with the company's focus on reducing debt instead.

"We must integrate Varian successfully," Sullivan said. "Again, we’re very, very pleased with the progress to date. But it would be very unrealistic for us to take on a major acquisition over the next six months."

Sullivan said the firm is raising its guidance for the remainder of the year. Agilent expects Q4 revenues of around $1.52 billion and non-GAAP EPS of $.58-$.59. For full-year 2010, the firm expects revenues of $5.4 billion, which would be 20 percent above its 2009 revenues and just above analysts' forecast of $5.38 billion, and non-GAAP EPS of $1.94-$1.95, above Wall Street estimates of $1.82.

In early Tuesday trade on the New York Stock Exchange, shares of Agilent were up 5 percent at $28.44.

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