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Agilent Q1 Revenues up 2 Percent on Growth in Life Sciences and Addition of Dako

NEW YORK (GenomeWeb News) – Agilent Technologies reported after the close of the market on Thursday a 2 percent bump in revenues during its fiscal first quarter but missed analyst estimates on the top and bottom lines.

Total revenues for the three months ended Jan. 31 came in at $1.68 billion, up from $1.64 billion during the first quarter of Fiscal Year 2012, but just short of the average analyst estimate of $1.69 billion.

Orders in the quarter reached $1.71 billion, a 6 percent increase from $1.62 billion a year ago.

By segment, Diagnostics and Genomics had the greatest growth, 147 percent year over year. The segment was created after Agilent purchased Dako in June for $2.2 billion, and during the fiscal first quarter it took in $163 million in revenues, compared to $66 million a year ago. Excluding the Dako purchase, Diagnostics and Genomics sales were up 4 percent year over year, Agilent said.

"Our overall genomics business grew in low-single digits with a continued strength in CGH arrays for the clinical market," Agilent CEO William Sullivan said on a conference call following the release of the results. "SureFISH sales continue to see high renewal rate."

Lars Holmkvist, SVP and president of Agilent's Diagnostics and Genomics group and former president and CEO of Dako, said on the call that the Dako business intends to introduce a new, fully automated instrument this coming summer that the firm believes "is going to drive the uptake here." He said the company already has the new system in customer sites.

He said that Agilent hasn't yet released specs of the new system but "internal benchmarking that we have would indicate that it is going to be a very, very high performing instrument. We will be expanding our clinical sites towards the … second calendar quarter of the year, and I expect us to be into a full swing launch somewhere in the third calendar quarter."

Life Sciences sales for the quarter were up 2 percent to $401 million from $395 million as pharma saw modest growth and the academic/government end market was flat.

"We continue to see solid growth in our Consumables and Service business and modest growth in our LC instrument platform," said Sullivan. "While we saw a decrease in our LC/MS business due to difficult year-over-year compares, orders grew in the low double-digits."

Chemical Analysis revenues slid a fraction of 1 percent to $394 million from $396 million, the result of soft environmental markets, while Electronic Measurement was down 7 percent to $722 million from $778 million.

Agilent turned a profit of $179 million, or $.51 per share, down from $230 million, or $.65 per share, a year ago. Adjusted EPS was $.63, missing the consensus Wall Street estimate of $.67.

The company recorded intangible amortization of $52 million in the quarter, compared to $27 million for Q1 2012, as well as acquisition, integration, and "transformational initiatives" costs of $13 million, compared to $15 million the prior year.

Agilent ramped up R&D spending 10 percent to $179 million from $162 million a year ago, and increased SG&A spending also 10 percent to $484 million from $441 million.

"While we currently face some volatility in our end markets, we remain excited by our long-term prospects, including opportunities in emerging markets," Sullivan said in a statement. "Agilent will continue to invest in R&D to ensure that we maintain the cutting-edge products and technology leadership that our customers expect from us."

The company finished the quarter with $2.45 billion in cash and cash equivalents.

For the fiscal second quarter Agilent guided to revenues in the range of $1.74 billion to $1.77 billion. Adjusted EPS is anticipated to be in the range of $.64 to $.70.

The company lowered its full-year fiscal 2013 revenue and adjusted EPS guidance. Revenue is now expected to be between $6.9 billion and $7.1 billion, down from a previous guidance of between $7.00 billion and $7.20 billion. Adjusted EPS guidance was revised to a new range of $2.70 to 3.00, down from an earlier range of $2.80 to $3.10.

In Friday morning trade on the New York Stock Exchange shares of Agilent were down 3 percent at $43.33.