Agilent Technologies Reports Third Quarter 2009 Results

During the third quarter, Agilent had restructuring and asset impairment charges of $81 million and $11 million of non-cash amortization. It also recognized a tax benefit of $36 million and had $16 million of other net charges. Excluding these items, Agilent reported third quarter adjusted net income of $53 million, or $0.15 per share. On a comparable basis, the company earned $198 million, or $0.53 per share, one year ago.

Given the extraordinarily difficult economic conditions around the world, Agilent performed well in our third quarter, said Bill Sullivan, Agilent president and chief executive. Our restructuring actions to lower Agilent's revenue breakeven by over half a billion dollars are on track. Third quarter revenues of $1.06 billion were off 27 percent from one year ago but close to our expectations. Uncharacteristically for a third quarter, orders of $1.07 billion exceeded revenues, and were off 23 percent from last year. Compared with three months ago, we have more confidence that the quarter just ended will represent the cyclical low point for Agilent.

Electronic Measurement revenues were down 36 percent, with continued weakness across all end markets and across all regions. Orders were down a less severe 26 percent and were up sequentially from Q2. Bio-analytical segment revenues were 8 percent below last year, with applied markets down 11 percent and life science off 5 percent. Bio-analytical segment orders declined 14 percent but were also up sequentially.

During the quarter, Agilent announced it signed a definitive agreement to acquire Varian, Inc. for $1.5 billion. Closing is subject to regulatory and Varian shareholder approval, as well as other customary conditions, and is expected by calendar year-end.

Third quarter Return On Invested Capital(2) fell to 9 percent compared with 27 percent one year ago because of lower earnings. The company generated $41 million of cash from operations during the seasonally weak third quarter and ended the quarter with net cash of $981 million.

Looking ahead, Sullivan said that market conditions are expected to remain difficult through fiscal year-end, while recent increases in quotation activity and order funnels suggest that a modest recovery could begin early in fiscal 2010.

We expect our fourth quarter revenues to improve seasonally, and that the benefits of our restructuring program will become increasingly evident in our operating results. Non-GAAP earnings(3) are expected to be in the range of $0.20 to $0.25 per share.