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Agilent Technologies Q3 Revenues Up 7 Percent

NEW YORK (GenomeWeb) – Agilent Technologies reported after the close of the market on Tuesday that its third quarter earnings rose 7 percent, thanks to strength across all of its business groups.

For the three months ended July 31, the company reported total revenues of $1.11 billion, up from $1.04 billion a year earlier, and beating the average analyst estimate of $1.09 billion.

Agilent's diagnostics and genomics group posted the quarter's biggest increase, reporting revenues of $197.0 million, up 9 percent from $180.0 million a year earlier. Revenues from the company's crosslab group rose 7 percent to $386.0 million from $360.0 million in Q3 2016, while revenues from the life sciences and applied markets group rose 5 percent to $531.0 million from $504.0 million.

"Our team is executing very well. We had another great quarter delivering above-market revenue growth, expanding operating margins and growing our adjusted EPS," Agilent President and CEO Mike McMullen said in a statement. "Our focus remains on driving sustainable above-market growth. We launched several new products that raise the bar on new capabilities for our customers. We also closed the acquisition of Cobalt Light Systems, enhancing our customer value proposition and providing us with immediate entry into the attractive, fast-growing Raman spectroscopy market."

On a conference call with analysts following the release of the earnings, McMullen said overall, the company saw strength across the board in its products and end markets. The chemical, energy, and pharma markets saw particularly strong growth, as did Europe and China.

McMullen also noted that many of Agilent's customers are now beginning to upgrade their labs and reinvest in new instruments, which is a positive indicator for the company. Agilent saw low single-digit growth in the academic market this quarter, which McMullen said made him optimistic for the state of that end market.

The diagnostics business grew well this quarter, he added, driven mostly by growth in companion diagnostics. In the life sciences business, Agilent's expertise in mass spectrometry and gas chromatography mass spec drove growth in the market. And in the crosslabs business, McMullen said, both services and consumables showed robust growth, and there was high demand from customers for pathology and companion diagnostics services and PD-L1 and molecular products. Agilent's nucleic acids business also performed well, growing in the double digits.

Agilent's Q3 net income rose to $175.0 million, or $.54 per share, from $124.0 million, or $.38 per share, a year ago. On an adjusted basis, the firm reported EPS of $.59, beating the average analyst expectation for EPS of $.52.

The company's Q3 R&D expenses rose 1 percent to $87.0 million from $86.0 million in the year-ago period, and its SG&A costs for the quarter fell 1 percent to $308.0 million from $310.0 million.

At the end of the quarter, Agilent had $2.56 billion in cash and cash equivalents.

For the fourth quarter, the company is expecting revenues in the range of $1.15 billion to $1.17 billion, and adjusted earnings of $.60 to $.62 per share. For fiscal year 2017, Agilent expects revenue of $4.44 billion to $4.46 billion and adjusted earnings of $2.29 to $2.31 per share. Analysts are expecting Q4 revenues of $1.15 billion and EPS of $.60 per share, and 2017 revenues of $4.41 billion and EPS of $2.23 per share.

Agilent's shares rose more than 3 percent to $61.37 in Wednesday morning trading on the New York Stock Exchange.