NEW YORK (GenomeWeb News) – Agilent Technologies reported after the close of the market on Wednesday that revenues for its fiscal third quarter shrank 4 percent year over year, although the Diagnostics and Genomics segment saw revenues grow 54 percent.
The company brought in a total of $1.65 billion for the three months ended July 31, down from $1.72 billion a year ago, but narrowly edging out the average Wall Street estimate of $1.64 billion.
Orders were down 4 percent year over year to $1.60 billion from $1.66 billion.
On a core basis, revenues were down 6 percent year over year, while orders were down 5 percent.
By segment, Diagnostics and Genomics saw the biggest year over year jump as revenues reached $163 million from $106 million. Excluding the Dako acquisition, completed in June 2012, segment revenues were up 6 percent, Agilent said.
Life Sciences grew around 3 percent to $401 million from $391 million, and Chemical Analysis inched up 2 percent to $387 million from $381 million.
For reporting purposes, the company last quarter replaced its former Bio-Analytical Measurement Group, made up of the Life Science and Chemical Analysis businesses, with the LDA Group, comprising life sciences, diagnostics and applied markets businesses. On a conference call following the release of Agilent's results, CEO William Sullivan said that LDA revenues for the third quarter were up 8 percent year over year to $951 million.
Agilent's clinical and diagnostics business, including Dako, was up 114 percent, or 16 percent organically, on "good demand" for Agilent's array CGH and target enrichment products, Sullivan said.
Environmental and forensic revenues were down 11 percent year over year, while academic/government revenues slipped 7 percent. Both declines were the result of the ongoing sequestration in the US, Sullivan said.
Agilent's pharmaceutical business grew 7 percent on technology upgrades, and food and energy was up 11 percent and 6 percent respectively.
Life Sciences revenue growth was led by consumables, services, support, and informatics, Sullivan said. In Diagnostics and Genomics, demand remained strong with Haloplex and SureSelect products in addition to strength in CGH.
Demand for Dako products, Sullivan added, approached market growth, which has slowed to low- to mid-single digits because of softness in the US and Europe. The launch of Dako's new Autostainer in Agilent's fiscal fourth quarter, however, is expected "to accelerate our growth."
In the fiscal fourth quarter, LDA is anticipated to grow in the mid-single digits, he said.
Agilent's largest segment, Electronic Measurement, slipped 17 percent to $701 million from $845 million.
Agilent's net profit was down to $168 million, or $.49 per share, compared to a profit $243 million, or $.69 per share, a year ago. On a non-GAAP basis, EPS was $.68, beating the consensus Wall Street estimate of $.62.
Agilent said intangible amortization in the quarter was $48 million, and integration and transformation costs totaled $14 million.
Its R&D costs rose 6 percent to $171 million from $162 million, while SG&A costs were trimmed 2 percent to $449 million from $458 million.
The Santa Clara, Calif.-based firm ended the quarter with $2.33 billion in cash and cash equivalents.
Agilent gave fourth quarter revenue guidance of between $1.70 billion and $1.72 billion, with non-GAAP EPS in the range of $.75 and $.77.
For full Fiscal Year 2013, the company said it expects revenue of between $6.76 billion and $6.78 billion and non-GAAP EPS of between $2.83 and $2.85.
During its fiscal second quarter, Agilent gave Full Year 2013 guidance of between $6.75 billion and $6.85 billion, and non-GAAP EPS of between $2.70 and $2.85.
Last quarter, Agilent announced a restructuring program that was anticipated to reduce headcount by about 450 employees and save the company $50 million in operating expenses each year.
CFO Didier Hirsch said on the call that the restructuring plan is on track, though he said about 500 employees would be affected. Most of the $50 million in savings will be achieved by the end of the first quarter of Fiscal Year 2014.
Also in FY Q2 2013, Agilent's board authorized an increase of $500 million to its existing share repurchase program, bringing the total amount in authorized buybacks to $1 billion, inclusive of amounts repurchased since Nov. 1, 2012.
Sullivan said on the call on Wednesday that Agilent repurchased 15 million shares in the third quarter and has utilized $900 million of its total authorization. The company expects the program to be completed by the end of calendar year 2013.
"Although we are operating in a very challenging economic environment, we are pleased with our operational performance, as we continue to make progress improving our manufacturing efficiency and streamlining our expense structure," Sullivan said in a statement.