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Agilent Sees Double-Digit Increase in Fiscal Q1 Array Sales

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By Justin Petrone

Agilent Technologies last week reported first-quarter revenue growth of 4 percent, led by double-digit growth in its Life Sciences and Chemical Analysis segments.

The Santa Clara, Calif.-based firm brought in total revenues of $1.21 billion for the three-month period ended Jan. 31, 2010, the first quarter of its fiscal year, compared to revenues of $1.17 billion for the first quarter of 2009. Agilent beat analysts' consensus estimate for revenues of $1.18 billion for the quarter.

Revenues for its Life Sciences segment were $340 million, up around 10 percent from $309 million for Q1 2009, while revenues for its Chemical Analysis segment increased 13 percent to $244 million from $216 million. The Electronic Measurement segment was a drag on revenue growth with a 2 percent decline to $629 million from $641 million.

CEO Bill Sullivan said during an earnings call that the firm's Life Sciences business had an "excellent quarter" driven by an 8 percent uptick in sales to pharmaceutical companies and a 15 percent spike in sales to academic and government customers.

Sullivan reported that the company saw "double-digit revenue growth in our microarray, reagent PCR, and informatic businesses." Agilent does not break out sales figures specific to its array business.

Chief Financial Officer Adrian Dillon said during the same call that Life Sciences sales were especially strong in Asia, where revenues, led by sales in China, rose 28 percent compared to the year-ago period.

Agilent broke out Japanese revenues separately from Asian sales, and said that the company performed similarly well there, seeing a 16 percent jump in sales year over year. Sales in the Americas were up 3 percent compared to the prior year period, as were European sales in local currency terms.

"China is the story of Agilent and right now China is the story for the world’s economy," Sullivan said.

Nick Roelofs, president of Agilent's Life Sciences group, added during the call that the company also benefited from an increase in public spending in Japan. "We did see some money flowing out of Japan and so if you looked at our [results] you’ll see that the Life Sciences group did very well in Japan," he told an analyst during the call.

Agilent posted a profit of $79 million, up 23 percent from $64 million for Q1 2009. Its adjusted net income — which excludes restructuring and asset impairment charges of $48 million and $10 million of non-cash amortization — was $135 million, compared to adjusted net income of $72 million for the comparable period of 2009.

Agilent's R&D spending for the quarter declined 12 percent to $149 million from $169 million, while its SG&A expenses increased 5 percent to $417 million from $396 million.

The firm finished the quarter with $1.55 billion in cash and cash equivalents and $12 million in short-term investments.

Looking forward, Sullivan said that "it is still early in the new economic cycle to be confident of future prospects," but Agilent's orders "suggest that the momentum will continue at a moderate pace, with broadening of the recovery across most markets and geographies as the year unfolds."

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