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Jefferies Raises Revenue, EPS Estimates for Agilent

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Jefferies today raised its EPS estimate for Agilent Technologies to $2.63 from $2.60, on the strength of recent organic order trends and anticipated minimal effects from the Japanese earthquake and tsunami.

The investment firm also increased the share-price target to $56 from $55 and revenue estimates for full-year 2011 to $6.39 billion from $6.35 billion. It has a "Buy" rating on Agilent.

Analyst Jon Wood wrote in a research note that in a recent meeting with Agilent CEO William Sullivan the company did not provide updates on revenue or order trends but said that organic orders rose 27 percent in February, signaling "its trajectory has remained elevated through early April."

Wood also noted a 14 percent organic revenue spike recently reported by Agilent competitor Danaher in its Test and Measurement business as well as that firm's outlook for double-digit core growth for the second quarter of the year.

He added that he anticipates the effects of the Japanese natural disaster to be "immaterial" in Agilent's second quarter, which wraps up at the end of this month. Last month, shortly after the earthquake and tsunami struck, Agilent issued a statement saying its operations in Japan were unaffected.

Investment house Macquarie Capital, however, said that Agilent could see issues arise because of exposure in its Semiconductor and Board Test segment, as several semiconductor manufacturers in Japan reported power outages and other disruptions in their plants.

Wood is projecting total organic revenue growth of 12 percent for 2011, with organic growth in Agilent's Life Sciences business expected to be 9 percent. The Varian acquisition is expected to add about $700 million in revenues to the firm, translating to an addition of $.07 to EPS.

For fiscal 2012, he raised revenue estimates to $6.75 billion from $6.71 billion, and EPS to $2.95 from $2.90.

In mid-afternoon trading, shares of Agilent were up 3 percent on the New York Stock Exchange at $49.46.

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