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Life Sciences Push Agilent Q2 Revenues up 32 Percent

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Agilent Technologies today reported a 32 percent jump in fiscal second-quarter revenues year over year, with its Life Sciences segment seeing a 39 percent spike.

The company reported total revenues of $1.68 billion for the three months ended April 30, up from $1.27 billion a year ago, beating Wall Street expectation of $1.6 billion. Excluding the effects of acquisitions and divestitures, revenues rose 21 percent in the quarter year over year.

Orders rose 26 percent to $1.70 billion from $1.35 billion.

Life Sciences revenues increased to $464 million, up from $334 million. On an organic basis, revenues were up 16 percent, with pharma and biotech driving the growth, the company said. Orders were up 45 percent to $479 million from $331 million a year ago.

On a conference call after the release of the financial results, Agilent CEO William Sullivan said that the firm saw continued growth in all markets in Life Sciences, driven by replacements and upgrades in instruments in big pharma. Academic and government revenues grew 9 percent.

Nick Roelofs, president of Life Sciences, added that sales of both Agilent's liquid chromatography platforms and mass spectrometers grew at least 20 percent during the second quarter.

By geography, revenues in Asia-Pacific increased 27 percent year over year organically, while the Americas were up 12 percent, and Europe climbed 22 percent.

In Japan, despite some concerns about exposure to Agilent's semiconductor business from the earthquake and tsunami, revenues were up 20 percent year over year and accounted for 12 percent of the firm's total revenues for the quarter, Sullivan said. The company does not expect any impact on the business going forward, and similarly, anticipates no problems with its supply chain, he added.

The company's other segments, Chemical Analysis and Electronic Measurement, saw revenue growth of 60 percent year over year to $381 million and 19 percent to $834 million, respectively.

Agilent's profit for the quarter increased 85 percent to $200 million, or $.56 per share, from $108 million, or $.31 per share, a year ago. On an adjusted basis, the company's EPS of $.74 beat analyst estimates of $.65.

In the quarter, Agilent had intangible amortization of $28 million, acquisition and integration costs of $17 million, and restructuring and transformational charges of $9 million. It added that it recognized a tax charge of $9 million.

The firm's R&D spending rose to $165 million, a 10 percent increase from $150 million in the second quarter of 2010. Its SG&A spending climbed to $469 million, up 15 percent from $407 million a year ago.

As Agilent approaches the one-year anniversary of its $1.5 billion acquisition of Varian next week, Sullivan was asked about possible M&A activity by the company.

While his appetite for deals is strong, Sullivan said that valuations for potential buys are "through the roof. As I have been very, very clear, we will not make an acquisition that we do not have high confidence of returning in a reasonable amount of time a cost to capital to our shareholders."

However, the main focus of Agilent's capital deployment strategy, he added, is on acquisitions, followed by returning excess cash to shareholders, either through a stock repurchase program or a dividend payout.

For the fiscal third quarter, Agilent gave revenue guidance of between $1.64 billion and $1.66 billion with non-GAAP EPS of between $.71 and $.73.

In addition, the company raised its guidance for full-year 2011. Agilent expects revenues to be between $6.55 billion and $6.60 billion with an EPS range of $2.84 to $2.88.

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