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Agilent’s Q4 Revenue Rise 8.9 Percent as Life Science Counters Flat Electronics Sales

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Pushed along by 30-percent growth in life sciences receipts, Agilent last week said overall revenues rose 8.9 percent for its fiscal fourth quarter.
 
During the quarter ended Oct. 31, the company posted overall revenues of $1.45 billion, up from $1.33 billion a year ago. The climb came almost exclusively from Agilent’s Bio-Analytical Measurement division, which houses the company’s proteomics tools. During the quarter receipts in the division increased 24 percent to $558 million from $450 million a year ago.
 
Meanwhile Agilent’s Electronic Measurement business was essentially flat, posting receipts of $888 million, compared to $878 million during the year-ago period.
 
Excluding the effects from the purchase of Stratagene, completed in June, Bio-Analytical revenues rose 19 percent during the quarter, year-over-year, the company said.
 
Within the division, life sciences posted revenues of $236 million, and chemical analysis revenues saw a 20 percent jump, year-over-year, to $322 million.
 
The Bio-Analytical business rose 15.8 percent to $571 million for the quarter, the sixth consecutive quarter of double-digit growth based on orders. Excluding orders related to Stratagene, orders in the division rose 11 percent.
 
In a conference call accompanying the release of the earnings, company officials called Bio-Analytical’s performance “excellent” and said prime revenue drivers during the quarter included its 1200 Series liquid chromatography system, mass spectrometers, and LC-MS systems.
 
“I will give you probably what’s a very highly biased viewpoint, [but] I think the data is very clear that the introduction of our mass specs, our introduction of our new LCs, our new GCs has been very favorably received by our customers in the marketplace,” CEO Bill Sullivan said during the call.
 
Since entering the high-end mass-spectrometry space in January 2006 with the 6410 triple-quadrupole and 6510 Q-TOF mass specs, the company has aggressively elbowed its way into the market, a development that has not been lost on its competitors. Earlier this month, Agilent launched the 6220 TOF and the 6520 Q-TOF as it continues to build up its instrument portfolio [See PM 11/08/07].
 
“Mass-spec demand including the triple quad and Q-TOF is particularly strong in pharma R&D,” CFO Adrian Dillon said during the call. “Fourth-quarter introduction of [the 6220 and 6520 instruments] brings … mass accuracy and dynamic range to our mass spec platform, and sales have ramped very well.”
 

“Mass spec demand including the triple quad and Q-TOF is particularly strong in pharma R&D.”

He also said that the company continued to see “sustained momentum in our LC and LC-MS product platforms …” In January 2006, Agilent introduced the 1200 Series LC. According to Sullivan, that platform, along with the 6000 Series mass specs, have been “positively received” by the marketplace “and will continue to drive revenue growth in the Bio-Analytical Measurement market.”
 
For full-year 2007, orders for the platforms were up 7 percent compared to a year ago to $5.4 billion, he said. While company officials have said in the past that they are taking market share from competitors, Sullivan shied away from making any specific claims last week.
 
“In terms of making comments of who we are taking market share [from], we never make comments like that,” he said. “Our competitors say that they’re not losing market share, so we are very pleased that we continue to expand the overall market.”
 
In 2007, the proteomics tools industry reported a gradual loosening of the purse strings by large pharmaceutical firms and biotech companies [See PM 08/09/07]. Sullivan said this week that he expects that to continue in 2008, and added that the potential for investments worldwide by academia and central research facilities to be “equal to the pharmaceutical biotech market.”
 
Geographically, revenues in the Americas were up 9 percent company-wide during the quarter, while receipts from European customers grew 18 percent, and Asian sales grew 3 percent. Bio-Analytical revenues rose 23 percent in the Americas and Europe, and 27 percent in Asia.
 
Agilent recorded a profit of $180 million for the quarter, up 20.8 percent from $149 million a year ago. It spent $174 million on R&D during the three-month period. As of Oct. 31, it had $1.83 billion in cash and cash equivalents.
 
For fiscal full-year 2007, Agilent’s receipts climbed 9 percent to $5.42 billion, compared to $4.97 billion in fiscal 2006. Orders rose 7.2 percent to $5.44 billion. The company’s profits slid to $638 million, compared to a profit of $3.31 billion a year ago.
 
Full-year 2006 results included more than $2.7 billion in gains from the sale of its Lumileds business and semiconductor business.
 
The company spent $685 million in R&D in 2007, up 4.6 percent from $655 million in 2006.
 
For the first quarter of its fiscal 2008, the company forecast revenues to be between $1.35 billion and $1.4 billion which would represent a 5 percent to 9 percent growth rate year over year.
 

The company also said last week that its board approved a $2 billion share repurchase program to take place during the next two years. It completed a previous $2 billion share buyback in October, bringing the total in repurchases to $6.466 billion since the program’s inception in 2005.

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