The Life Sciences and Chemical Analysis division of Agilent Technologies led the company's four business segments with 13-percent growth in total revenues for the quarter ending Jan. 31, the company reported this week, as Ned Barnholt, who has led the company since it spun off Hewlett-Packard in 1999, prepared to hand the reins over to William Sullivan.
Barnholt, who is chairman, CEO, and president, will retire at the end of the month. Sullivan, who is executive vice president and COO, will become president and CEO. James Cullen, an Agilent director since 2000, will assume the position of non-executive chairman.
Sullivan, who joined Barnholt in the formal presentation of the company's results on Monday, and afterwards joined in fielding questions from analysts, said he has no agenda for change.
"I will focus on meeting the commitments we have made, with no changes in the long-term plans," he said. "We will continue to assess our business portfolio and make adjustments to meet our business goals."
Ironically, the change in leadership a planned transition announced last month comes at a time when HP, the company from which Agilent spun off in 1999, also faces a change at the top. Last week, HP's board forced the resignation of CEO Carly Fiorina, who began her tenure by executing the divestiture of what many would regard as the core elements of Hewlett-Packard, in $2.1 billion IPO for Agilent.
Overall, for the quarter, Agilent had revenues of $1.65 billion, up 1 percent over revenue of $1.64 billion for the comparable year-ago period, but essentially flat when excluding currency-exchange benefits.
The company reported R&D expenditures of $231 million in the quarter, compared to $219 million for the year-ago period. SG&A expenses grew to $901 million, compared to $887 million for the same period last year.
Agilent's LSCA division reported revenue of $354 million for the period, some 21 percent of the company's top line, compared to $313 million for the year-ago quarter. The unit has grown from accounting for 11 percent of Agilent's revenues in 2000, and operating at break-even levels, to providing an expected 20 percent of Agilent's total revenues, the company said, in FY '05, which ends in October.
Agilent's Test and Measurement unit reported 10-percent revenue growth, posting $700 million compared to $637 million in the year-ago quarter. The segment contributed nearly 50 percent of Agilent's revenues for the quarter.
Meantime, the company's Semiconductor Products unit reported a 5 percent drop in revenues to $450 million from $474 million in Q1 '04, while revenues for the Automated Test unit dropped 29 percent, to $155 million in total revenues for the period, compared to $219 million a year ago.
Net income overall was $103 million for the period, up from $71 million for the year-ago period. It was boosted by Test and Measurement's $63 million net and a $51 million net-income contribution from the LSAC unit, which recorded $47 million in the year-ago quarter. The company's Semiconductor unit contributed $27 million in earnings while the Automated Test segment had a loss of $34 million.
"Life Sciences and Chemical Analysis had very good momentum on the top line," Adrian Dillion, Agilent's CFO, said.
Dillon told analysts that the company, which reported $2.5 billion in cash on hand at the end of the quarter, would consult with the board on what to do with the cash, and would continue to consider additional "fold-in" acquisitions, as made by the LSCA division, which include the January acquisition of Cambridge, Mass.-based Computational Biology and the acquisition of Silicon Genetics in August.
For the second quarter, the company warned that revenues would be "relatively flat," ranging from $1.6 billion to $1.7 billion, as a result of the some $70 million in revenues lost from the divestiture of its camera module business, and from seasonal increases in employee expenditures.
Barnholt said the recent launch of the 5100 automated Lab-on-a-Chip platform for the measurement of DNA and proteins has been promising.
"It has been very well received," he said. "The order ramp is pretty slow it's still pretty early but over the year, this will have a pretty significant impact on our business in life sciences."
Mo Krochmal ([email protected])