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Agilent Q4 Revenues Slip 3 Percent but Beats Analyst Estimates on Top, Bottom Lines

NEW YORK (GenomeWeb News) – Agilent Technologies said after the close of the market on Thursday that revenues for its fiscal fourth quarter were down 3 percent year over year, but the company still beat the average analyst estimate on the top and bottom lines.

For the three months ended Oc. 31, Agilent's total revenues dipped to $1.72 billion, compared to $1.77 billion a year ago, edging out the consensus Wall Street estimate of $1.71 billion.

The company had $1.83 billion in orders, up almost 5 percent from $1.75 billion a year ago.

Its Life Sciences and Diagnostics segment recorded $601 million in revenues in the quarter, up from $557 million a year ago. Orders were up to $642 million from $575 million a year ago.

Chemical Analysis revenues increased to $412 million, compared to $394 million a year ago, while orders were up to $445 million from $421 million. Its Electronic Measurement revenues were down to $705 million from $816 million, and orders decreased to $742 million from $755 million.

On Agilent's conference call following the release of its financial results, CEO Bill Sullivan said that the LDA group, comprising the company's life sciences, diagnostics and applied markets businesses, set record levels in orders, revenues, and operating profits. Q4 orders of $1.09 billion were up 9 percent year over year, while revenues of $1.01 billion represented 6 percent growth.

Within LDA, pharma revenues grew 10 percent year over year on technology upgrades, while food and energy was up 7 percent and 5 percent respectively, Sullivan said.

Clinical and diagnostic revenues grew 16 percent, driven by pathology, reagent partnerships, and companion diagnostics by Dako, as well as record volumes for Agilent's legacy genomics products, he said. The environmental and forensics business was flat, Sullivan added, but academic/government was up 4 percent on a relatively easy comparison from the year-ago period.

Agilent's profit for Q4 FY 2013 dropped to $211 million, or $.63 per share, from $425 million, or $1.20 per share, a year ago.

Agilent recorded intangible amortization of $48 million in the recently completed quarter, along with integration and transformation costs of $12 million, one-time separation costs of $5 million, and a tax benefit of $9 million. Excluding these items and $4 million of other net charges, adjusted EPS was $.81, topping the consensus Wall Street estimate of $.76.

The company trimmed its R&D costs to $173 million in the quarter, down 3 percent from $178 million a year ago. Its SG&A spending decreased 3 percent to $450 million from $466 million.

"We finished the year with a solid quarter, building backlog and exceeding EPS guidance despite challenges in several of our markets," Agilent CEO Bill Sullivan said in a statement. "This reflected our ongoing commitment to actively manage expenses and reduce manufacturing costs in a period of economic uncertainty."

In September, Agilent announced it would split into two publicly traded companies, one focused on its life science and diagnostics business, the other on its electronic measurement business. Sullivan said on the call Thursday that Agilent continues to "make excellent progress" on the split.

By August 2014, the electronic measurement company is anticipated to operate independent of the life science and diagnostic business, which will keep the Agilent name, and in early November 2014, the split is expected to be completed, he said.

The electronic measurement business will operate as a fully owned subsidiary of Agilent, Sullivan added.

For full year Fiscal 2013, Agilent said that revenues were down 1 percent to $6.78 billion from $6.86 billion, and just above the average analyst estimate of $6.77 billion.

Orders for the year were down a fraction of 1 percent to $6.83 billion from $6.88 billion.

Net income for the year dropped to $724 million, or $2.10 per share, compared to $1.15 billion, or $3.27 per share in FY 2012. Adjusted EPS was $2.88, beating the consensus Wall Street estimate of $2.84.

Agilent upped its R&D spending 5 percent during the year to $704 million from $668 million in FY 2012. Its SG&A spending was up 3 percent to $1.88 billion from $1.82 billion a year ago.

The company finished its fiscal year with $2.68 billion in cash and cash equivalents.

For the first quarter of FY 2014, Agilent gave revenue guidance of between $1.68 billion and $1.70 billion, with adjusted EPS of $.65 to $.67.

Full-year FY 2014 revenue is expected to be between $6.95 billion and $7.15 billion, while EPS is expected to be between $3.03 and $3.33.

In LDA, the outlook for FY 2014 looks "promising," Sullivan said on the call, and "we expect positive trends to continue across food, energy, pharma, clinical, and diagnostics markets," supported by a pipeline of new products during the coming year.

For the first quarter of FY 2014, LDA is expected to generate revenues of between $900 million and $1.01 billion, which would represent more than 5 percent growth year over year at the midpoint, Sullivan said.

Full-year FY 2014 LDA revenues are anticipated in the $4.03 billion to $4.13 billion range, which would represent more than 4 percent growth year over year at the midpoint, he said.