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Agilent (A) Q1 Earnings & Revenues Beat, ’18 View Positive


Agilent Technologies, Inc A delivered first-quarter fiscal 2018 non-GAAP earnings of 66 cents per share, which beat the Zacks Consensus Estimate by 8 cents. The figure also increased 24.5% from the year-ago quarter.

Revenues of $1.21 billion increased 13.2% year over year driven by strong growth across all regions, particularly Europe and Asia-Pacific. Europe (31.6% of revenues) increased 18.7% to $381 million, while Asia-Pacific (36.2% of revenues) grew 13.5% to $437 million. Americas increased almost 9% year over year to $393 million.

Segment Details

Life Sciences & Applied Markets Group (“LSAG”) revenues accounted for $616 million or 51.1% of total revenues, reflecting an increase of 14.3% year over year. This was driven by double-digit gains in major platforms led by Mass Spec and Cell analysis. Robust demand in Europe and China as well as strong end-markets drove top-line growth.

During the quarter, Agilent acquired Luxcel Biosciences, a developer of real-time fluorescence plate-readers based in-vitro cell assay kits.

Agilent Technologies, Inc. Price, Consensus and EPS Surprise

Agilent Technologies, Inc. Price, Consensus and EPS Surprise | Agilent Technologies, Inc. Quote

Diagnostics and Genomics Group (“DGG”) came in at $408 million or 33.8% of total revenues. The segment revenues were up 12.4% year over year, driven by strong demand for pathology products and companion diagnostics services.

During the quarter, Agilent launched CRISPR Activation and Interference (a/i) libraries and GenetiSure Dx Postnatal Assay.

Revenues from Agilent Cross Lab Group (“ACG”) came in at $182 million or 15.1% of total revenues, reflecting an increase of 11.7% year over year. Both services and consumables witnessed growth. China and Food led growth across all regions and major end-markets.

During the quarter, Agilent launched the ValueLab line of consumables for China and CrossLab Service Guarantee.

End-Market Revenue Details

Analytical Laboratory contributed 86% of revenues and increased 11% year over year.

Diagnostics & Clinical end-market accounted for the remaining 14% of revenues and increased 5% driven by robust performance from pathology and companion diagnostics, particularly in the Americas and Japan.

Analytical Laboratory comprises Pharma & Biotech, Academia & Govt., Environmental & Forensics, Food and Chemical & Energy end-markets.

Pharma & Biotech accounted for 29% of total revenues and increased 8% year over year on th back of balanced growth across instruments, services and consumables in both Small molecule and Bio-pharma.

Academia & Govt. accounted for 9% of total revenues and increased 11% year over year owing to strong demand in Europe and China.

Environmental & Forensics accounted for 12% of total revenues and increased 14% year over year driven by strength in Forensics and demand for GC, GC/MS, and ICP/MS.

Food contributed 11% of total revenues and increased 8% year over year led by consumables, mass spec and GC with regional strength in Europe.

Chemical & Energy contributed 25% of total revenues and increased 13% year over year led by robust performance across regions, products and sub-segments.

Operating Details

Non-GAAP gross margin expanded 170 basis points (bps) on a year-over-year basis to 56.7%.

Non-GAAP research & development (R&D) expenses as percentage of revenues declined 10 bps to 7.6%. However, non-GAAP selling, general & administrative (SG&A) expenses as percentage of revenues expanded 60 bps to 27.2%.

Non-GAAP operating margin expanded 140 bps on a year-over-year basis to 22.3% in the reported quarter.

Segment wise, LSAG and ACG operating margin expanded 240 bps and 120 bps on a year-over-year basis, respectively. However, DGG operating margin contracted 200 bps from the year-ago quarter.


For second-quarter fiscal 2018, Agilent expects revenues between $1.20 billion and $1.22 billion, up 9.5% year over year at mid-point. Non-GAAP earnings are expected in the range of 61-63 cents.

For fiscal 2018, Agilent projects revenues in the range of $4.885-$4.905 billion and non-GAAP earnings in the range of $2.62-$2.68 per share.

At mid-point, adjusted operating margin is projected to be 22.6%.

Agilent anticipates returning dividends worth $190 million during the fiscal year. Currently, the company has a share buyback authorization worth $380 million.

Zacks Rank and Stocks to Consider

Currently, Agilent has a Zacks Rank #3 (Hold).

Stocks worth considering in the broader technology sector are Teradyne TER, AMETEK AME and Fortive FTV. While Teradyne sports a Zacks Rank #1 (Strong Buy), AMETEK and Fortive carry Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Teradyne, AMETEK and Fortive is projected to be 12%, 11.50% and 9.69%, respectively.

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