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Agilent Life Sciences Revenues Rise 28 Percent on Strong China, India Sales

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By Justin Petrone

Agilent Technologies reported this week that its third-quarter revenues increased 31 percent, with double-digit growth across all of its segments.

The Santa Clara, Calif.-based firm brought in total revenues of $1.38 billion for the three-month period ended July 31, compared to $1.06 billion for the third quarter of 2009.

Revenues in its life science segment rose 28 percent, or 15 percent organically, to $374 million from $293 million year over year. Company officials attributed the spike in life science sales, which include Agilent's mass spectrometry and microarray product lines, to increased demand from emerging Asian markets.

The company does not specifically break out array sales, and Agilent did not respond to questions about the performance of its array product line during fiscal Q3 in time for this publication.

"We're seeing money in Southeast Asia, and these monies will continue to flow, as governments invest in healthcare and in life science researching," said Nick Roelofs, president of Agilent's Life Science Group, during the firm's earnings call this week.

Chief Financial Officer Didier Hirsch said that total organic geographic revenues during the quarter rose by 28 percent in Asia Pacific, 25 percent in the Americas, and 18 percent in Europe. Organic revenue growth in China and India was "very solid" at 24 percent and 43 percent, respectively, he noted.

Agilent's other businesses also grew during the quarter. Revenues for its chemical analysis segment grew 62 percent, or 13 percent organically, to $329 million from $203 million, while revenues for its electronic measurement business increased 24 percent to $692 million from $561 million. Excluding the divestiture of its Network Solutions business, revenues for the electronic measurement segment increased 34 percent.

Revenues in the life science and chemical analysis segments were partially helped by the firm's $1.5 billion acquisition of Varian in May. "The Varian integration is going well, and we had excellent organic growth across all of our instrument platforms and geographies," Agilent President and CEO Bill Sullivan said in a statement.

Sullivan said during the call that life science's strength in emerging markets was offset by softness among big pharma accounts, which he attributed to consolidation. "Sales of Life Science platforms into food, environmental and other applied markets remain very strong, particularly for the LC and LC/MS instruments," said Sullivan, noting that "LC sales were up 25 percent year-over-year."

Agilent posted net income of $205 million compared to a net loss of $19 million for Q3 2009. On an adjusted basis, net income was $191 million.

The firm's R&D spending for the quarter increased 1 percent to $154 million from $153 million, while its SG&A spending increased 18 percent to $456 million from $387 million.

Agilent finished the quarter with $2.32 billion in cash and cash equivalents, as well as $1.56 billion in short-term restricted cash and cash equivalents.

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