Agilent Technologies Reports First Quarter 2010 Results

During the first quarter, Agilent had restructuring and asset impairment charges of $48 million and $10 million of non-cash amortization. Excluding these items and $2 million of other net charges, Agilent reported first quarter adjusted net income of $135 million, or $0.38 per share. On a comparable basis, the company earned $72 million, or $0.20 per share, one year ago.

The economic momentum Agilent began to see late last year continued in our fiscal first quarter, said Bill Sullivan, Agilent president and chief executive. First quarter revenues of $1.21 billion were up sequentially for the second consecutive quarter, and were 4 percent above one year ago.

First quarter Electronic Measurement revenues were down 2 percent from one year ago, but orders were up 8 percent, with solid demand from industrial, computer and semiconductor. Chemical Analysis revenues were 13 percent above one year ago, while orders were up 12 percent. Life Sciences revenues were 10 percent ahead of last year, while orders were up 9 percent from one year ago.

Non-GAAP earnings of $0.38 per share were well above our expectations, said Sullivan, demonstrating the power of Agilent's operating model as our markets begin to recover. Our restructuring actions to lower Agilent's revenue breakeven by over half a billion dollars can also be clearly seen in this quarter's operating results. Early in the new upturn, we are already reporting mid-cycle operating margins of 15 percent and a 21 percent Return On Invested Capital(2).

First quarter ROIC of 21 percent compared with 11 percent one year ago. Inventory Days On Hand improved by 19 days to 93, while Receivables Days Sales Outstanding, at 47, improved by two days. The company generated $30 million of cash from operations during the seasonally weak first quarter. It ended the quarter with net cash of $1.20 billion.

Looking ahead, Sullivan said, It is still early in the new economic cycle to be confident of future prospects but our orders suggest that the momentum will continue at a moderate pace, with broadening of the recovery across most markets and geographies as the year unfolds.

We expect our fiscal second quarter revenues to be about 12 - 15 percent above last year, while non-GAAP earnings(3) are expected to be in the range of $0.38 - $0.42 per share compared to $0.13 one year ago. For the full fiscal year 2010, we now expect Agilent stand-alone revenues to be up roughly 10 percent and non-GAAP earnings to be in the range of $1.65 - 1.70 per share.

During the quarter, Agilent announced it had received conditional antitrust clearance from the European Commission (EC) for Agilent's proposed acquisition of Varian Inc. The company is in the process of divesting certain assets in order to comply with the remedies required by the EC. Clearance by the U.S. Federal Trade Commission (FTC) is still pending, although we do not expect the FTC to seek additional remedies in markets beyond those committed to for the European Commission.