NEW YORK – Agilent Technologies said after the close of the market Monday that its fiscal fourth quarter revenues fell 9 percent year over year on lower sales from its life sciences and applied markets business, although the firm's diagnostics and genomics revenues were up slightly over the prior-year period.
For the three months ended Oct. 31, the Santa Clara, California-based firm reported revenues of $1.69 billion, down from $1.85 billion a year ago but slightly above analysts' consensus estimate of $1.67 billion. President and CEO Mike Mullen said in a statement that the revenues reflect strong execution in a challenging year and the firm is primed for long-term growth.
"As we look ahead to 2024, we anticipate a slow but steady recovery," he said. "We have high confidence in the markets in which we have invested, the strength and resilience of our team, and the benefits of our build-and-buy growth strategy."
McMullen said in a conference call that the company's Q4 revenues in China fell 31 percent year over year, which followed 44 percent growth during Q4 2022 compared to Q4 2021. He said he is confident, though, that the company will return to revenue growth in the country.
The company reported its Diagnostics and Genomics Group revenues were up 1 percent, or flat on a core basis, to $356 million from $352 million in the fourth quarter of the prior year. McMullen said that Agilent saw double-digit revenue growth from its pathology and nucleic acid solutions division, but that growth was offset by a decline in sales in genomics instruments and consumables.
Its Life Sciences and Applied Markets Group's revenues fell 17 percent year over year, or 18 percent on a core basis, to $928 million compared to $1.12 billion one year earlier. McMullin attributed that decline to lower capital spending, particularly among pharma customers, although that was partly offset by growth in per- and polyfluoroalkyl substances (PFAS) testing and the advanced materials businesses.
CFO Bob McMahon added during the call that Agilent's revenues in its largest end market, pharma, declined 14 percent in Q4 year over year compared to 20 percent growth in the year-ago quarter.
Agilent CrossLab Group's revenues rose 6 percent, or 4 percent on a core basis, to $404 million compared to $381 million in Q4 of 2022. That group brought in higher income in all regions except China, McMullen said.
Agilent announced in August plans to shutter its Resolution Bioscience liquid biopsy business due to lack of demand for kitted next-generation sequencing-based companion diagnostics, but it inked a deal the following month to sell that business to Exact Sciences on undisclosed terms. Exact said it plans to use the acquisition to develop liquid biopsies to complement its lineup of tissue-based tests.
Despite the shakeup around Resolution, a company executive said earlier this month Agilent is deepening its commitment to kitted companion diagnostics development by forming more partnerships with pharma firms early in drug development.
Agilent posted net income of $475 million, or $1.62 per share, compared to a net income of $368 million, or $1.23 per share, in the year ago quarter. On a non-GAAP basis, the firm reported EPS of $1.38 compared to the Wall Street consensus estimate of $1.34 per share.
For the full fiscal year, Agilent's Diagnostics and Genomics Group revenues rose 1 percent, or 3 percent on a core basis, to $1.41 billion compared to $1.39 billion in fiscal year 2022. Its Life Sciences and Applied Markets Group reported revenues for the year were down 4 percent, or 2 percent on a core basis, to $3.86 billion from $4.01 billion in the year prior. And Agilent CrossLab Group revenues rose 8 percent, or 10 percent on a core basis, to $1.57 billion compared to $1.45 billion during the previous year.
Its total revenues for the fiscal year were $6.83 billion versus $6.85 billion for FY 2022 and inched past the average Wall Street estimate of $6.82 billion.
The firm reported net income of $1.24 billion, or $4.19 per share, for fiscal year 2023 compared to a net profit of $1.25 billion, or $4.18 per share, in 2022. The company's non-GAAP EPS was $5.44 per share, just a few cents above analysts' consensus estimate of $5.41 per share.
Agilent ended the fiscal year with $1.59 billion in cash and cash equivalents.
Agilent expects revenues of $1.56 billion to $1.61 billion in the first quarter of fiscal year 2024. Non-GAAP EPS is expected to be in the range of $1.20 to $1.23. Full-year fiscal 2024 revenues are expected to be between $6.71 billion and $6.81 billion, and EPS is expected to be in the range of $5.44 to $5.55.
In morning trading on Tuesday on the New York Stock Exchange, Agilent’s shares were up about 8 percent to $123.49.