Earnings Highlights and Review: Agilent Revenue Gained 8%; GAAP EPS Soared 79%
Research Desk Line-up: Foundation Medicine Post Earnings Coverage
LONDON, UK / ACCESSWIRE / June 9, 2017 / Pro-Trader Daily publishes post-earnings coverage on Agilent Technologies, Inc. (NYSE: A) following the Company's disclosure of its second quarter fiscal 2017 financial results on May 22, 2017. The scientific instrument maker outperformed top- and bottom-line expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at: http://protraderdaily.com/register/.
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Earnings Reviewed
Agilent reported revenue of $1.10 billion for the second fiscal quarter ended April 30, 2017, up 8% on a y-o-y basis compared to revenue of $1.02 billion in Q2 FY16. The Company's results exceeded the high-end of its own guidance by $42 million and were up 9% on a core basis. Agilent's revenue numbers also surpassed analysts' consensus estimates of $1.05 billion.
During Q2 FY17, Agilent delivered an adjusted operating margin of 22.1%, up 270 basis points from the year ago same period. This was the ninth consecutive quarter of improving operating margin for the Company.
For Q2 FY17, Agilent's GAAP net income was $164 million, or $0.50 per share, compared to GAAP net income $91 million, or $0.28 per share, for Q2 FY16. During the reported quarter, Agilent had intangible amortization of $31 million, acquisition and integration costs of $7 million, and $2 million in other costs. Excluding these items and a tax benefit of $17 million, Agilent reported Q2 FY17 non-GAAP net income of $187 million, or $0.58 per share. The Company's earnings results surpassed Wall Street's expectations of $0.48 per share.
"The Agilent team delivered another excellent quarter," said Mike McMullen, Agilent's President and CEO, "Both revenue and earnings per share exceeded the high range of guidance. We saw a strong pick up in the Chemical and Energy business after modest gains last quarter, and strong growth in Pharma and Europe also contributed to the upside."
Segment Results
During Q2 FY17, revenue from Agilent's Life Sciences and Applied Markets Group (LSAG) grew 6% on a y-o-y basis to $523 million, driven by stronger-than-expected pickup in the chemical and energy market with 14% core growth. The 12% core growth in pharma also exceeded expectations. LSAG's operating margin for the reported quarter was 21.1%.
Agilent's CrossLab Group (ACG) grew 9% y-o-y to $378 million, or 10% on a core basis. The segment's enterprise services and consumables sector continued to see solid growth across all geographies. ACG's operating margin for the reported quarter was 21.6%. The reported quarter revenue of $201 million from Agilent's Diagnostics and Genomics Group (DGG) grew 13% on a y-o-y basis and 13% on a core basis, led by pharma and diagnostic and clinical end-markets. DGG's operating margin for Q2 FY17 was 24.2%.
Cash Matters
As of April 30, 2017, Agilent's cash and cash equivalents totaled $2.39 billion compared with $2.23 billion as on October 31, 2016. Net cash provided by Company's operating activities was $257 million compared to $254 million on Q2 FY16. In the reported quarter, Agilent paid $43 million in dividends and repurchased 1.64 million shares for $83 million.
Outlook
For Q3 FY17, Agilent is forecasting revenue in the range of $1.06 billion to $1.08 billion; at mid-point, revenue is expected to grow 4% on a core basis. The upcoming quarter's non-GAAP earnings are expected to be in the range of $0.49 to $0.51 per share.
For fiscal year 2017, Agilent raised the mid-oint of its revenue guidance by $30 million, including $10 million due to currency. Thus, the Company is increasing its core revenue growth guidance at mid-point from 4.5% to 5% and expects revenue of $4.36 billion to $4.38 billion and non-GAAP earnings of $2.15 to $2.21 per share.
Stock Performance
At the closing bell, on Thursday, June 08, 2017, Agilent Technologies' stock was slightly down 0.79%, ending the trading session at $60.15. A total volume of 3.48 million shares have exchanged hands, which was higher than the 3-month average volume of 1.93 million shares. The Company's stock price skyrocketed 16.96% in the last three months, 34.14% in the past six months, and 30.34% in the previous twelve months. Moreover, the stock soared 32.02% since the start of the year. The stock is trading at a PE ratio of 33.77 and has a dividend yield of 0.88%. The stock currently has a market cap of $19.36 billion.
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