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Agilent Technologies Q4 Revenues Surge 7 Percent

This article has been updated from a previous version to include comments made by Agilent executives in an earnings call.

NEW YORK (GenomeWeb) – Agilent Technologies reported after the close of the market Tuesday that its fiscal fourth quarter revenues increased 7 percent year over year, with growth across all three of its business groups.

For the three months ended Oct. 31, 2016, Agilent reported total revenues of $1.11 billion, up from $1.04 billion in the third quarter of 2015, and besting the average analyst estimate for revenues of $1.07 billion. On a core basis, excluding currency impacts, the NMR business, and acquisitions and divestitures over the last three months, core revenues were up 6 percent year over year.

"We are very pleased with our full-year and Q4 results," Agilent CFO Didier Hirsch said on a conference call following the release of results.

Sales for its CrossLab Group were $370 million, up 8 percent year over year, while sales for its Diagnostics and Genomic Group were up 8 percent to $193 million, led by strength in pathology and nucleic acid solutions. Revenues for its Life Sciences and Applied Markets Group grew 6 percent year over year to $548 million with strength in pharma, food, and forensics.

Agilent CEO Mike McMullen said he was "surprised by the strength of our instrument business in pharma, China, and Europe, which far exceeded our expectations." Agilent saw growth upwards of 25 percent year over year in China.

McMullen noted that the Agilent 8900 Triple Quadrupole mass spectrometry system is "being well received in the market," and that the firm's focus on improving its recently acquired Dako business is paying off. "Pathology continues to climb back to market growth rates," he said, and the PD-L1 assay developed with Merck as a companion diagnostic for Keytruda will benefit from the drug's US Food and Drug Administration's approval as a first-line treatment.

Agilent posted a profit of $124 million, or $.38 per share, in Q4 compared to $140 million, or $.42 per share, for Q4 2015. On a non-GAAP basis, its EPS was $.59, beating the consensus Wall Street estimate of $.52.

The firm's R&D spending increased 2 percent to $84 million, while its SG&A expenses were up 8 percent to $321 million.

For full fiscal year 2016, Agilent reported total revenues of $4.20 billion, up 4 percent from $4.04 billion in the FY 2015, and ahead of the Wall St. estimate of $4.16 billion.

Full-year net income was $460 million, or $1.40 per share, compared to $401 million, or $1.31 per share in 2015. On an adjusted basis, full-year EPS was $1.98, ahead of analysts' average estimate of $1.93 per share.

Full-year R&D expenses remained relatively flat at $329 million, while SG&A expenses grew 5 percent to $1.25 billion.

Agilent finished the quarter with $2.29 billion in cash and cash equivalents.

"Our initial guidance assumes appropriate caution," Hirsch said. For the first fiscal quarter of 2017, Agilent expects to report revenues in the range of $1.04 billion to $1.06 billion with non-GAAP EPS of between $.48 and $.50 per share, both below Wall Street's consensus estimates of $1.08 billion in revenues and EPS of $.53. Hirsch noted that Lunar New Year starts in Q1 this year, shifting approximately $15 million in revenue into Q2. For full-year 2017, Agilent expects revenues of $4.35 billion to $4.37 billion, with EPS of $2.10 to $2.16 per share.

Leerink analyst Puneet Souda called the guidance "relatively solid," while Barclays analyst Jack Meehan said in a note that it "could prove conservative."