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Agilent Posts Falloff in Q1 Revenues and Profit, Plans More Layoffs

NEW YORK (GenomeWeb News) – Agilent Technologies reported after the close of the market on Tuesday that total revenues for its first fiscal quarter fell 16 percent while net income dropped 47 percent as the company "felt the full brunt of the severe, worldwide economic downturn,” President and CEO Bill Sullivan said in a statement.

For the quarter ended Jan. 31, 2009, Agilent's total revenues fell to $1.17 billion from $1.39 billion — "well below" the company's expectations, Sullivan said.

While the firm's Bio-Analytical Measurement revenues fell 1 percent year over year, that segment was a relative bright spot for the firm, which saw revenues for its Semiconductor and Board Test and Electronic Measurement segments plummet 49 percent and 23 percent, respectively.

Agilent posted first-quarter net income of $64 million, or $.18 per share, compared to $120 million, or $.31 per share, in the year-ago period.

Sullivan said that the company plans to expand a restructuring plan it announced in December, in which it took steps to lay off 500 full-time staffers in order to save approximately $65 million per year.

Under the expanded restructuring initiative, the company will close two small board-inspection businesses and "begin a restructuring of its global infrastructure operations." This will require the layoff of another 600 staffers and will reduce annual operating costs by around $150 million, Agilent said.

The cost of the restructuring should be in the range of $100 million.

The company's Bio-Analytical Measurement business, which includes its Life Sciences and Chemical Analysis businesses, posted a 2 percent dip in orders to $523 million from $532 million in the year-ago period — the end of a nearly three-year period of double-digit order growth for the business, the company said. Bio-Analytical revenues fell 1 percent to $525 million from $531 million.

Geographically, the Bio-Analytical business saw the most weakness in Europe, which was down 11 percent from the comparable period a year ago. Revenue in the Americas was up 1 percent, while Asia was up 10 percent from the prior-year period, with "particular strength" in China.

Agilent said that its gas chromatography and liquid chromatography product lines were relatively weak for the quarter, while microarrays and liquid chromatography/mass spectrometry grew in the double digits over last year.

Within the BioAnalytical segment, the Life Sciences group posted revenues of $238 million, down 1 percent from one year ago. Agilent said that spending by pharma and biotech customers fell 8 percent, "with weakness in replacement business while consumables and services remained steady."

Agilent saw 20 percent growth in Life Science sales to the academic and government sectors, however, "with particular strength in microarrays and LC/MS systems."

Agilent's total R&D spending for the first quarter fell 7 percent to $169 million from $181 million in the year-ago period. SG&A expenses declined 10 percent to $396 million from $441 million.

Sullivan said that it is difficult for the firm to provide guidance in the current economic climate. “We don’t know where, or when, this recession will bottom," he said. “Forecasting in the current environment is almost futile, as visibility is virtually nil."

The company's "best guess," he said, is that second quarter revenues will be "roughly in line" with first-quarter results.

As of Jan. 31, Agilent had $1.36 billion in cash and cash equivalents.

The company's shares were down 7.4 percent at $16.34 in Wednesday morning trade.

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