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Agilent's Life Sciences Sales Rise 39 Percent in Q2 on 'Strong' Array Demand

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By Justin Petrone

Agilent Technologies continues to see strong demand for its life science research tools, including microarrays, which contributed to a 39 percent increase in second-quarter revenues for the company's Life Sciences business while company-wide sales rose 32 percent.

CEO Bill Sullivan said the firm saw "solid growth" in second-quarter sales of liquid chromatographers, mass spectrometers, microarrays, automation tools, and informatics.

He also singled out Agilent's SureSelect target-enrichment business, saying it reflects the firm's strategy of growing consumables sales.

"The company has still 75 percent hardware, 25 percent consumables and services," he said during an earnings call, referring to Agilent's revenue split. "The continued success of SureSelect as … a sample-preparation [approach] for next-generation sequencing continues to be very, very successful."

Sullivan added that he would "love to see that mix" of hardware and consumables sales more balanced and that the company is "continuing to focus in that area."

Santa Clara, Calif.-based Agilent said companywide fiscal Q2 revenue rose 32 percent to $1.68 billion from $1.27 billion a year ago. Excluding the effects of acquisitions and divestitures, revenue rose 21 percent.

Life Sciences revenues performed slightly better. Receipts for the three months ended April 30 increased 39 percent to $464 million from $334 million year over year. Sullivan said that sales to biopharmaceutical companies grew 16 percent year over year and were "driven by the replacement and upgrades for lab instrumentation."

By comparison, sales to academic and government customers grew 9 percent year over year, he said.

Agilent continues to perform well in Asia Pacific, where organic sales rose 27 percent year over year (BAN 8/17/2010). By comparison, European sales grew 22 percent while sales to North and South American customers grew 12 percent.

Broken down by country, in Japan fiscal Q2 revenue rose 20 percent year over year and accounted for 12 percent of Agilent's global receipts during the period, Sullivan said. And in China, organic revenue swelled 40 percent year over year, which Chief Financial Officer Didier Hirsch called an "exceptional performance."

The company's other segments performed well in Q2. Chemical Analysis and Electronic Measurement saw revenue growth of 60 percent year over year to $381 million and 19 percent to $834 million, respectively.

Agilent's profit for the quarter increased 85 percent to $200 million from $108 million a year ago.

The firm's R&D spending rose 10 percent to $165 million from $150 million during the same period one year ago. SG&A spending, meantime, climbed 15 percent to $469 million from $407 million a year ago.

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