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Agilent's Q1 Revenues Spike 25 Percent

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Agilent Technologies recorded a 25 percent year-over-year increase for its fiscal-year 2011 first quarter, including a 19 percent increase in its Life Sciences segment, the company reported on Monday after the close of the market.

For the three months ended Jan. 31, the Santa Clara, Calif., company posted revenues of $1.52 billion across the entire company, up from $1.21 billion during the fiscal first quarter of 2010. The firm came up short of consensus Wall Street estimates of $1.55 billion in revenues.

Agilent had orders of $1.63 billion for the quarter, a 33 percent spike from $1.22 billion during the year ago period.

The Life Sciences segment posted revenues of $404 million for the quarter, up from $340 million a year ago, while orders rose to $442 million, a 32 percent jump from $336 million a year ago.

On a conference call, company officials said that during the quarter Varian-related revenues totaled $134 million, about $30 million short of expectations, which negatively affected revenues in both Life Sciences, by about $10 million, and Chemical Analysis by about $20 million.

William Sullivan, president and CEO of Agilent, said on the call the shortfall was due to moving Varian's quote-to-cash process to the Agilent system and issues related to end-of-month pipeline logistics.

"We just basically ran out of time," he said. "Our processes are quite a bit different from Varian's … and $30 million was trapped, either shipped and not invoiced or trapped in our logistic centers and not shipped or fully recognized by the customers."

The $30 million is expected to be recognized during the second quarter, Sullivan added.

In Life Sciences, the academic/government end market grew 12 percent organically year over year, while sales to the pharma-biotech end market expanded 6 percent.

Sales of platforms in Life Sciences was strong, Sullivan said, particularly in liquid chromatography systems and mass spectrometers, driven by an acceleration in instrument replacement cycles, though he did not provide any figures.

Agilent also saw strong demand for its genomics, open-laboratory informatics, automation, NMR, and MRI products, he added.

The firm's net income for the period came in at $193 million, or $0.54 per share, up 144 percent from $79 million, $0.22 per share, from a year ago.

During the quarter, Agilent recorded intangible amortization of $28 million, Varian-related acquisition and integration costs of $19 million, and restructuring charges of $13 million, it said, as well as a tax benefit of $41 million.

In comparison, the first quarter of 2010 included restructuring and asset impairment charges of $48 million and non-cash amortization of $10 million.

On an adjusted basis, the company posted EPS of $0.60, beating analysts' expectations of $0.57 per share.

Agilent's Chemical Analysis segment saw revenues increase 43 percent to $349 million from $244 million, and its Electronic Measurement segment revenues rose 23 percent to $771 million from $629 million.

By geography, the firm's Americas business grew by 24 percent organically, while Asia-Pacific expanded by 21 percent, and Europe grew by 4 percent.

Agilent's R&D spending during the quarter increased to $159 million from $149 million, a 7 percent climb. Its SG&A costs also increased 7 percent to $446 million from $417 million.

As of Jan. 31, the company reported it had $2.64 billion in cash and cash equivalents.

For the fiscal second quarter of 2011, Agilent expects revenues of between $1.59 billion and $1.61 billion. Non-GAAP earnings are expected to fall between $0.63 per share and $0.65 per share, which compares to $0.43 per share from a year ago.

For full-year fiscal 2011, the company raised its revenue guidance to between $6.3 billion and $6.4 billion, and non-GAAP EPS estimate to between $2.53 and $2.63. A quarter ago, Agilent gave guidance of between $6.1 billion and $6.3 billion in revenues for FY 2011, and non-GAAP EPS of between $2.30 and $2.50.

In Tuesday morning trade on the New York Stock Exchange, shares of Agilent were down 3 percent at $43.43.

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