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Agilent Life Sciences' Q2 Revenues Rise 12 Percent on Strong Asian Sales

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By Justin Petrone

Agilent Technologies this week said that total revenues grew 16 percent during its fiscal second quarter while receipts for its Life Sciences business rose 12 percent.

The Santa Clara, Calif.-based firm reported sales of $1.27 billion for the three-month period ended April 30, compared to $1.09 billion for the second quarter of 2009. Revenues from its Life Sciences group increased to $334 million from $298 million in Q2 2009, while Chemical Analysis receipts climbed 19 percent to $238 million and Electronics Measurement sales rose 18 percent.

Company officials attributed the spike in Life Sciences sales, which include receipts from the firm's microarray business, to double-digit demand in Asia. In particular, sales in Japan rose 27 percent in the quarter, while the rest of Asia Pacific rose 25 percent, Chief Financial Officer Didier Hirsch said during the company's earnings call this week. In comparison, sales were up 9 percent in the Americas and 4 percent in Europe.

CEO William Sullivan said Agilent maintains a "large and established presence" in Asia that will "continue to serve as a strong competitive differentiator." Overall, he said, 41 percent of Agilent's business was in Asia during Q2, though he noted that Agilent saw year-over-year revenue growth in most of its "key markets."

While Agilent does not break out revenues for its array line, officials noted particular demand for its SureSelect target-enrichment products. In the earnings call, Sullivan said that Agilent saw "double-digit growth" in its SureSelect offerings, which debuted last year. The solution- and array-based products are designed to enable scientists to sequence genomic areas of interest with second-generation sequencing instruments (BAN 2/9/2009, BAN 7/14/2009).

Growth during the period was also driven by an increase in adoption in applied markets, such as cytogenetics and agricultural biotechnology. Indeed, sales of Life Sciences products in applied markets swelled 25 percent from Q2 2009. By comparison, Life Sciences sales to pharmaceutical and biotech companies rose 4 percent, year over year, while sales to academic and government customers were up 11 percent compared to Q2 '09, Sullivan noted.

Meantime, Agilent posted a $108 million profit for Q2 compared to a $101 million loss a year ago. During the quarter, Agilent had restructuring charges of $22 million, costs of $10 million related to its acquisition of Varian, and $9 million of non-cash amortization, the company said.

For Q2 2009, Agilent took asset impairment charges of $98 million and a non-cash amortization charge of $12 million. It also recognized a quarter-to-date tax adjustment of $31 million and had other net charges of $4 million.

The company spent $150 million in R&D during Q2 2010, down 12 percent year over year from $170 million. Its SG&A spending was flat at $407 million.

Agilent finished the quarter with $2.65 billion in cash and cash equivalents, as well as $1.55 billion in short-term restricted cash and cash equivalents.

For full-year fiscal 2010, revenues are projected to increase 12 percent year over year to more than $5 billion.

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