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New Revenue, Operating Margins Goals Drive Agilent Shares up 8 Percent

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Shares of Agilent Technologies rose more than 8 percent on Friday, a day after company officials increased its operating margin and return on invested capital goals under its operating model.

Shares of the company's stock on the New York Stock Exchange rose to $46.34 in late afternoon trade on Friday after company officials increased its operating margin goal to 20 percent on Thursday during its analyst meeting. The company had previously stated a range of 9 percent to 20 percent with a mid-point range of 14 percent.

Agilent also said that its most probable ROIC is 25 percent. Previously it had projected a 13 percent to 35 percent range with a mid-point of 21 percent.

The results are predicated on anticipated organic revenue growth of 8 percent. Agilent had earlier projected organic revenue growth at a range of zero to greater than 10 percent, with a midpoint of 6 percent.

The last time the firm presented its operating model was in December 2006, and since then the investment community has clamored for an update, Agilent CFO Didier Hiirsch said during a webcast of the meeting, adding that the firm waited for the Varian purchase, completed last May, to be integrated into Agilent before doing so.

The company's operating model has not changed, he emphasized, only the financial outcomes have. Part of the reason for the improved financial goals under its operating model is that Agilent has successfully moved away from higher volatility markets to more stable ones, Hirsch said.

Within Agilent's three divisions, the organic revenue growth goal is greatest in the Life Science Group at 10 percent, leading to 15 percent operating.

The Chemical Analysis Group is anticipated to experience 8 percent organic revenue growth leading to 23 percent operating, and the company's Electronic Measurement Group is expected to see 6 percent organic revenue growth, with 21 percent operating.

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