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Agilent Fiscal Q1 Revenues up 2 Percent; Lowers 2015 Guidance

NEW YORK (GenomeWeb) – Agilent Technologies said after the close of the market on Tuesday that revenues for its fiscal first quarter rose 2 percent year over year, as the company matched the average analysts' estimates on the top and bottom lines. 

For the three months ended Jan. 31, Agilent record $1.03 billion in revenues, equaling the consensus Wall Street estimate. Agilent CFO Didier Hirsch said on a conference call following the release of the firm's financial results that currency effects negatively impacted Q1 2015 revenues by $12 million and EPS by $.01.

Orders in the quarter also were up 2 percent to $995 million from $979 million a year ago. 

Q1 2015 was the first quarter that Agilent reported its financial results excluding the electronic measurement business, which was spun out as a separate firm called Keysight Technologies on Nov. 1, 2014. It also is the last quarter before William Sullivan retires from the firm as CEO, to be replaced by Mike McMullen.   

By segment, the Life Sciences and Applied Markets Group posted $547 million in revenues for the first quarter, up 2 percent year over year from $537 million on broad-based growth across most product lines and geographies, Agilent said. Meanwhile, revenue for the Diagnostics and Genomics Group was down 6 percent to $148 million from $157 million a year ago as regulatory expenses and manufacturing issues that were resolved late in the first quarter offset strength in companion diagnostics

McMullen said on the call that the manufacturing issues were associated with the firm's nucleic acid businesses. 

The Agilent Crosslab Group had $331 million in revenues, a 5 percent increase from $314 million a year ago on strength across the company's analytical services and consumables business, the firm said. 

By end market, pharma revenues were up 6 percent year over year, McMullen said, while academia and government revenues grew 1 percent, and food testing was up 5 percent. Environmental improved 4 percent, and chemical and energy was flat year over year. 

Forensics was down 2 percent year over year as some US state and federal agencies delayed capital purchases due to budget uncertainties, McMullen said. Lastly, clinical and diagnostics declined 4 percent because of the company's manufacturing capacity constraints. 

Agilent's first quarter profit declined to $72 million, or $.21 per share, from $195 million, or $.59 per share, a year ago. Adjusted EPS was $.41, matching the consensus Wall Street estimate. 

Its R&D spending was flat year over year at $88 million, while its SG&A costs rose 4 percent to $310 million from $298 million. In the most recently completed quarter, Agilent also recorded a loss of $30 million from discontinued operations, net of tax, compared to a gain of $74 million in Q1 2014. 

Agilent finished the quarter with $2.12 billion in cash and cash equivalents. 

"In Q1, we delivered a strong start to the year, driven by the strength of our core analytical lab business," McMullen said on the call. "We had strong profitability despite currency headwinds and strong challenges in our Diagnostics and Genomics business." 

He also said that Agilent has launched a restructuring program, as well as a multiyear "Agile Agilent" program, aimed at "reengineering our company to be more nimble, efficient, and customer-focused." In total, Agilent expects minimum savings of $50 million in 2015 from the combined initiatives. 

For Q2, Agilent said that revenues are expected to be between $985 million and $1.01 billion with non-GAAP EPS of between $.37 and $.41. 

For FY 2015, Agilent lowered its guidance to revenues of between $4.06 billion and $4.12 billion, and non-GAAP EPS of $1.67 to $1.73. In November, when the company announced its Q4 2014 financial results, Agilent guided to revenues of between $4.12 billion and $4.18 billion with non-GAAP EPS of $1.68 to $1.78.

The strengthening of the US dollar is expected to tamp down full-year 2015 revenues by $130 million and EPS by $.08, Didier said. Initiatives taken by Agilent, however, are expected to offset currency effects by $.05.