Revenue and earnings exceed Q1 guidance
Full-year outlook maintained
Highlights
- Revenue of $1.66 billion, down 5.6% reported and 6.4% core(1)
from the first quarter of 2023.
- GAAP net income of $348 million; earnings per share (EPS) of
$1.18, down 1% from the first quarter of 2023.
- Non-GAAP(2) net income of $380 million; EPS of $1.29, down 6%
from the first quarter of 2023.
- Full-year revenue outlook maintained at $6.710 billion to
$6.810 billion, representing a range of down 1.8% to 0.3% on a
reported basis and down 0.5% to up 1% core(1). Fiscal year 2024
non-GAAP(3) earnings guidance also maintained at a range of $5.44
to $5.55 per share.
- Second-quarter revenue outlook expected at $1.560 billion to
$1.590 billion with non-GAAP(3) EPS of $1.17 to $1.20.
Agilent Technologies Inc. (NYSE: A) today reported revenue of
$1.66 billion for the first quarter ended Jan. 31, 2024, a decline
of 5.6% reported and 6.4% core(1) compared to the first quarter of
2023.
First-quarter GAAP net income was $348 million, or $1.18 per
share. This compares with $352 million, or $1.19 per share, in the
first quarter of fiscal year 2023. Non-GAAP(2) net income was $380
million, or $1.29 per share during the quarter, compared with $406
million or $1.37 per share during the first quarter a year ago.
“The Agilent team continued its strong execution in the first
quarter, delivering better-than-expected revenue and earnings,”
said President and CEO Mike McMullen. “We are well positioned for
long-term growth driven by our diversified business and multiple
growth drivers. While near term market challenges remain, I
continue to be optimistic about our future.”
Financial Highlights
In the first quarter of 2024, Agilent implemented certain
changes to its segment reporting structure. Prior period segment
information has been recast to reflect these changes. These changes
have no impact on Agilent’s consolidated financial statements.
Life Sciences and Applied Markets Group
Agilent’s Life Sciences and Applied Markets Group (LSAG)
reported first-quarter revenue of $846 million, a decline of 10%
reported and 11% core(1) year-over-year. LSAG’s operating margin
for the quarter was 27.9%.
Agilent CrossLab Group
The Agilent CrossLab Group (ACG) reported first-quarter revenue
of $405 million, an increase of 6% reported and 5% core(1)
year-over-year. ACG’s operating margin for the quarter was
30.2%.
Diagnostics and Genomics Group
The Diagnostics and Genomics Group (DGG) reported first-quarter
revenue of $407 million, a decrease of 6% reported and 6% core(1)
year-over-year. DGG’s operating margin for the quarter was
17.3%.
Full Year 2024 and Second-Quarter Outlook
Full-year revenue outlook is maintained at $6.710 billion to
$6.810 billion, representing a range of down 1.8% to 0.3% on a
reported basis and down 0.5% to up 1% core(1). Fiscal year 2024
non-GAAP(3) earnings guidance is also maintained with a range of
$5.44 to $5.55 per share.
The outlook for second-quarter revenue is expected in the range
of $1.560 billion to $1.590 billion, a decline of 9.1% to 7.4%
reported and a decline of 8.4% to 6.7% core(1). Second-quarter
non-GAAP(3) earnings guidance is expected in the range of $1.17 to
$1.20 per share.
The outlook is based on forecasted currency exchange rates.
Conference Call
Agilent’s management will present additional details regarding
the company’s first-quarter 2024 financial results on a conference
call with investors today at 1:30 p.m. PST. This event will be
broadcast live online in listen-only mode. To listen to the
webcast, select the “Q1 2024 Agilent Technologies Inc. Earnings
Conference Call” link on the Agilent Investor Relations website.
The webcast will remain on the company site for 90 days.
About Agilent Technologies
Agilent Technologies Inc. (NYSE: A) is a global leader in
analytical and clinical laboratory technologies, delivering
insights and innovation that help our customers bring great science
to life. Agilent’s full range of solutions includes instruments,
software, services, and expertise that provide trusted answers to
our customers' most challenging questions. The company generated
revenue of $6.83 billion in fiscal 2023 and employs approximately
18,000 people worldwide. Information about Agilent is available at
www.agilent.com. To receive the latest Agilent news, subscribe to
the Agilent Newsroom. Follow Agilent on LinkedIn and Facebook.
Forward-Looking Statements
This news release contains forward-looking statements as defined
in the Securities Exchange Act of 1934 and is subject to the safe
harbors created therein. The forward-looking statements contained
herein include, but are not limited to, information regarding
Agilent’s growth prospects, business, financial results, revenue,
and non-GAAP earnings guidance for Q2 and fiscal year 2024 and
future amortization of intangibles. These forward-looking
statements involve risks and uncertainties that could cause
Agilent’s results to differ materially from management’s current
expectations. Such risks and uncertainties include, but are not
limited to, unforeseen changes in the strength of Agilent’s
customers’ businesses; unforeseen changes in the demand for current
and new products, technologies, and services; unforeseen changes in
the currency markets; customer purchasing decisions and timing; and
the risk that Agilent is not able to realize the savings expected
from integration and restructuring activities. In addition, other
risks that Agilent faces in running its operations include the
ability to execute successfully through business cycles; the
ability to meet and achieve the benefits of its cost-reduction
goals and otherwise successfully adapt its cost structures to
continuing changes in business conditions; ongoing competitive,
pricing and gross-margin pressures; the risk that its cost-cutting
initiatives will impair its ability to develop products and remain
competitive and to operate effectively; the impact of geopolitical
uncertainties and global economic conditions on its operations, its
markets and its ability to conduct business; the ability to improve
asset performance to adapt to changes in demand; the ability of its
supply chain to adapt to changes in demand; the ability to
successfully introduce new products at the right time, price and
mix; the ability of Agilent to successfully integrate recent
acquisitions; the ability of Agilent to successfully comply with
certain complex regulations; and other risks detailed in Agilent’s
filings with the Securities and Exchange Commission, including its
annual report on Form 10-K for the fiscal year ended October 31,
2023. Forward-looking statements are based on the beliefs and
assumptions of Agilent’s management and on currently available
information. Agilent undertakes no responsibility to publicly
update or revise any forward-looking statement.
(1) Core revenue growth excludes the impact of currency and
acquisitions and divestitures within the past 12 months. Core
revenue is a non-GAAP measure. Reconciliations between GAAP revenue
and core revenue for Q1 fiscal year 2024 are set forth on page 6 of
the attached tables along with additional information regarding the
use of this non-GAAP measure. Core revenue growth rate as projected
for Q2 fiscal year 2024 and full fiscal year 2024 excludes the
impact of currency and acquisitions and divestitures within the
past 12 months. Most of the excluded amounts pertain to events that
have not yet occurred and are not currently possible to estimate
with a reasonable degree of accuracy and could differ materially.
Therefore, no reconciliation to GAAP amounts has been provided for
the projection.
(2) Non-GAAP net income and non-GAAP earnings per share
primarily exclude the impacts of restructuring and other related
costs, asset impairments, intangibles amortization,
transformational initiatives, acquisition and integration costs,
net loss on equity securities and change in fair value of
contingent consideration. Agilent also excludes any tax benefits or
expenses that are not directly related to ongoing operations, and
which are either isolated or are not expected to occur again with
any regularity or predictability. A reconciliation between non-GAAP
net income and GAAP net income is set forth on page 4 of the
attached tables along with additional information regarding the use
of this non-GAAP measure.
(3) Non-GAAP earnings per share as projected for Q2 fiscal year
2024 and full fiscal year 2024 exclude primarily the estimated
impacts of non-cash intangibles amortization, transformational
initiatives, and acquisition and integration costs. Agilent also
excludes any tax benefits or expenses that are not directly related
to ongoing operations, and which are either isolated or are not
expected to occur again with any regularity or predictability. Most
of these excluded amounts pertain to events that have not yet
occurred and are not currently possible to estimate with a
reasonable degree of accuracy and could differ materially.
Therefore, no reconciliation to GAAP amounts has been provided.
Future amortization of intangibles is expected to be approximately
$27 million per quarter.
AGILENT TECHNOLOGIES, INC. CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS (In millions, except per share
amounts) (Unaudited) PRELIMINARY Three
Months Ended January 31,
2024
2023
Net revenue
$
1,658
$
1,756
Costs and expenses: Cost of products and services
750
788
Research and development
128
123
Selling, general and administrative
396
419
Total costs and expenses
1,274
1,330
Income from operations
384
426
Interest income
18
9
Interest expense
(22
)
(25
)
Other income (expense), net
23
—
Income before taxes
403
410
Provision for income taxes
55
58
Net income
$
348
$
352
Net income per share: Basic
$
1.19
$
1.19
Diluted
$
1.18
$
1.19
Weighted average shares used in computing net income per
share: Basic
293
296
Diluted
294
297
The preliminary income statement is estimated based on our
current information. Page 1
AGILENT TECHNOLOGIES,
INC. CONDENSED CONSOLIDATED BALANCE SHEET (In
millions, except par value and share data) (Unaudited)
PRELIMINARY January 31, October 31,
2024
2023
ASSETS Current assets: Cash and cash equivalents
$
1,748
$
1,590
Accounts receivable, net
1,295
1,291
Inventory
1,033
1,031
Other current assets
262
274
Total current assets
4,338
4,186
Property, plant and equipment, net
1,314
1,270
Goodwill
3,967
3,960
Other intangible assets, net
443
475
Long-term investments
170
164
Other assets
716
708
Total assets
$
10,948
$
10,763
LIABILITIES AND EQUITY Current liabilities: Accounts
payable
$
488
$
418
Employee compensation and benefits
272
371
Deferred revenue
522
505
Other accrued liabilities
335
309
Total current liabilities
1,617
1,603
Long-term debt
2,555
2,735
Retirement and post-retirement benefits
102
103
Other long-term liabilities
486
477
Total liabilities
4,760
4,918
Total Equity: Stockholders' equity: Preferred stock; $0.01
par value; 125,000,000 shares authorized; none issued and
outstanding at January 31, 2024 and October 31, 2023
—
—
Common stock; $0.01 par value, 2,000,000,000 shares authorized;
293,041,817 shares at January 31, 2024 and 292,123,241 shares at
October 31, 2023, issued and outstanding
3
3
Additional paid-in-capital
5,440
5,387
Retained earnings
1,061
782
Accumulated other comprehensive loss
(316
)
(327
)
Total stockholders' equity
6,188
5,845
Total liabilities and stockholders' equity
$
10,948
$
10,763
The preliminary balance sheet is estimated based on our
current information. Page 2
AGILENT TECHNOLOGIES,
INC. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions) (Unaudited) PRELIMINARY
Three Months Ended January 31, January
31,
2024
2023
Cash flows from operating activities: Net income
$
348
$
352
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
62
67
Share-based compensation
44
44
Deferred taxes
—
4
Excess and obsolete inventory related charges
11
7
Net (gain) loss on equity securities
(3
)
10
Asset impairment charges
8
—
Change in fair value of contingent consideration
—
1
Other non-cash (income) expense, net
(6
)
1
Changes in assets and liabilities: Accounts receivable, net
10
(5
)
Inventory
(9
)
(69
)
Accounts payable
84
(27
)
Employee compensation and benefits
(104
)
(174
)
Other assets and liabilities
40
85
Net cash provided by operating activities (a)
485
296
Cash flows from investing activities: Payments to acquire
property, plant and equipment
(90
)
(76
)
Proceeds from sale of equity securities
—
4
Payments to acquire equity securities
—
(1
)
Proceeds from convertible note
—
2
Payments in exchange for convertible note
(5
)
(3
)
Payments to acquire businesses and intangible assets, net of cash
acquired
—
(30
)
Net cash used in investing activities
(95
)
(104
)
Cash flows from financing activities: Proceeds from issuance
of common stock under employee stock plans
34
35
Payment of taxes related to net share settlement of equity awards
(25
)
(51
)
Payments for repurchase of common stock
—
(75
)
Payments of dividends
(69
)
(67
)
Repayments of long-term debt
(180
)
—
Net proceeds from short-term debt
—
203
Payment for contingent consideration
—
(62
)
Net cash used in financing activities
(240
)
(17
)
Effect of exchange rate movements
7
22
Net increase in cash, cash equivalents and restricted cash
157
197
Cash, cash equivalents and restricted cash at beginning of
period
1,593
1,056
Cash, cash equivalents and restricted cash at end of period
$
1,750
$
1,253
Reconciliation of cash, cash equivalents and
restricted cash to the condensed consolidated balance sheet:
Cash and cash equivalents
$
1,748
$
1,250
Restricted cash, included in other assets
2
3
Total cash, cash equivalents and restricted cash
$
1,750
$
1,253
(a) Cash payments included in operating activities:
Income tax paid, net of refunds received
$
24
$
17
Interest payments, net of capitalized interest
$
14
$
15
The preliminary cash flow is estimated based on our current
information. Page 3
AGILENT TECHNOLOGIES, INC.
NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS (In
millions, except per share amounts) (Unaudited)
PRELIMINARY Three Months Ended January
31,
2024
2023
Net Income Diluted EPS Net Income Diluted
EPS GAAP net income
$
348
$
1.18
$
352
$
1.19
Non-GAAP adjustments: Restructuring and other related costs
3
0.01
—
—
Asset impairments
8
0.03
—
—
Intangible amortization
26
0.09
36
0.12
Transformational initiatives
3
0.01
7
0.02
Acquisition and integration costs
2
0.01
2
0.01
Net loss on equity securities
—
—
12
0.04
Change in fair value of contingent consideration
—
—
1
—
Other
(6
)
(0.02
)
3
0.01
Adjustment for taxes (a)
(4
)
(0.02
)
(7
)
(0.02
)
Non-GAAP net income
$
380
$
1.29
$
406
$
1.37
(a) The adjustment for taxes excludes tax expense (benefits)
that management believes are not directly related to on-going
operations and which are either isolated, temporary or cannot be
expected to occur again with any regularity or predictability such
as the realized gain/loss due to sale of a business, windfall
benefits on stock compensation, and the impact of R&D
capitalization under section 174 of the Tax Cuts and Jobs Act of
2017. For the three months ended January 31, 2024, management used
a non-GAAP effective tax rate of 13.50%. For the three months ended
January 31, 2023, management used a non-GAAP effective tax rate of
13.75%. We provide non-GAAP net income and non-GAAP net
income per share amounts in order to provide meaningful
supplemental information regarding our operational performance and
our prospects for the future. These supplemental measures exclude,
among other things, charges related to restructuring and other
related costs, asset impairments, amortization of intangibles,
transformational initiatives, acquisition and integration costs,
net loss on equity securities and change in fair value of
contingent consideration.
Restructuring and other related
costs include incremental expenses incurred in the period
associated with restructuring programs, usually aimed at changes in
business and/or cost structure. Such costs may include one-time
termination benefits, facility-related costs and contract
termination fees.
Asset impairments include assets
that have been written down to their fair value.
Transformational initiatives include expenses associated
with targeted cost reduction activities such as manufacturing
transfers including costs to move manufacturing, small site
consolidations, legal entity and other business reorganizations,
insourcing or outsourcing of activities. Such costs may include
move and relocation costs, one-time termination benefits and other
one-time reorganization costs. Included in this category are also
expenses associated with company programs to transform our product
lifecycle management (PLM) system, human resources and financial
systems.
Acquisition and integration costs include
all incremental expenses incurred to effect a business combination.
Such acquisition costs may include advisory, legal, accounting,
valuation, and other professional or consulting fees. Such
integration costs may include expenses directly related to
integration of business and facility operations, the transfer of
assets and intellectual property, information technology systems
and infrastructure and other employee-related costs.
Net
loss on equity securities relates to the realized and
unrealized mark-to-market adjustments for our marketable and
non-marketable equity securities.
Change in fair value of
contingent consideration represents changes in the fair value
estimate of acquisition-related contingent consideration.
Other includes acceleration of share-based compensation
expense and certain legal costs and settlements in addition to
other miscellaneous adjustments. Our management uses
non-GAAP measures to evaluate the performance of our core
businesses, to estimate future core performance and to compensate
employees. Since management finds this measure to be useful, we
believe that our investors benefit from seeing our results “through
the eyes” of management in addition to seeing our GAAP results.
This information facilitates our management’s internal comparisons
to our historical operating results as well as to the operating
results of our competitors. Our management recognizes that
items such as amortization of intangibles can have a material
impact on our cash flows and/or our net income. Our GAAP financial
statements including our statement of cash flows portray those
effects. Although we believe it is useful for investors to see core
performance free of special items, investors should understand that
the excluded items are actual expenses that may impact the cash
available to us for other uses. To gain a complete picture of all
effects on the company’s profit and loss from any and all events,
management does (and investors should) rely upon the GAAP income
statement. The non-GAAP numbers focus instead upon the core
business of the company, which is only a subset, albeit a critical
one, of the company’s performance. Readers are reminded that
non-GAAP numbers are merely a supplement to, and not a replacement
for, GAAP financial measures. They should be read in conjunction
with the GAAP financial measures. It should be noted as well that
our non-GAAP information may be different from the non-GAAP
information provided by other companies. The preliminary
non-GAAP net income and diluted EPS reconciliation is estimated
based on our current information. Page 4
AGILENT
TECHNOLOGIES, INC. SEGMENT INFORMATION (In millions,
except where noted) (Unaudited) PRELIMINARY
Quarter-over-Quarter Life Sciences
and Applied Markets Group Q1'24 Q1'23 Revenue
$
846
$
943
Gross Margin, %
60.2
%
61.5
%
Income from Operations
$
236
$
300
Operating margin, %
27.9
%
31.8
%
Diagnostics and Genomics Group Q1'24
Q1'23 Revenue
$
407
$
432
Gross Margin, %
52.8
%
52.6
%
Income from Operations
$
70
$
73
Operating margin, %
17.3
%
16.9
%
Agilent CrossLab Group Q1'24
Q1'23 Revenue
$
405
$
381
Gross Margin, %
50.5
%
48.5
%
Income from Operations
$
122
$
103
Operating margin, %
30.2
%
27.0
%
Income from operations reflect the results of our reportable
segments under Agilent's management reporting system which are not
necessarily in conformity with GAAP financial measures. Income from
operations of our reporting segments exclude, among other things,
charges related to restructuring and other related costs, asset
impairments, amortization of intangibles, transformational
initiatives, acquisition and integration costs and change in fair
value of contingent consideration. Readers are reminded that
non-GAAP numbers are merely a supplement to, and not a replacement
for, GAAP financial measures. They should be read in conjunction
with the GAAP financial measures. It should be noted as well that
our non-GAAP information may be different from the non-GAAP
information provided by other companies. The preliminary
segment information is estimated based on our current information.
Page 5
AGILENT TECHNOLOGIES, INC.
RECONCILIATIONS OF REVENUE BY SEGMENT EXCLUDING
ACQUISITIONS, DIVESTITURES AND THE IMPACT OF CURRENCY ADJUSTMENTS
(CORE) (in millions) (Unaudited)
PRELIMINARY Year-over-Year GAAP
Year-over-Year GAAP Revenue by
Segment Q1'24 Q1'23 % Change
Life Sciences and Applied Markets Group
$
846
$
943
(10
%)
Diagnostics and Genomics Group
407
432
(6
%)
Agilent CrossLab Group
405
381
6
%
Agilent
$
1,658
$
1,756
(6
%)
Non-GAAP(excluding Acquisitions &
Divestitures) Year-over-Yearat Constant Currency (a)
Year-over-Year Year-over-Year Percentage Point
Impact from Currency Current Quarter Currency Impact (b)
Non GAAP Revenue by Segment
Q1'24 Q1'23 % Change % Change
Life Sciences and Applied Markets Group
$
846
$
943
(10
%)
(11
%)
1 ppt
$
7
Diagnostics and Genomics Group
407
430
(5
%)
(6
%)
1 ppt
4
Agilent CrossLab Group
405
381
6
%
5
%
1 ppt
5
Agilent (Core)
$
1,658
$
1,754
(5
%)
(6
%)
1 ppt
$
16
We compare the year-over-year change in revenue
excluding the effect of recent acquisitions and divestitures and
foreign currency rate fluctuations to assess the performance of our
underlying business. (a) The constant currency
year-over-year growth percentage is calculated by recalculating all
periods in the comparison period at the foreign currency exchange
rates used for accounting during the last month of the current
quarter and then using those revised values to calculate the
year-over-year percentage change. (b) The dollar impact from
the current quarter currency impact is equal to the total
year-over-year dollar change less the constant currency
year-over-year change. The preliminary reconciliation of
GAAP revenue adjusted for recent acquisitions and divestitures and
impact of currency is estimated based on our current information.
Page 6
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Investor Contact: Parmeet Ahuja +1 408-345-8948
parmeet_ahuja@agilent.com
Media Contact: Tom Beermann +1 408-553-2914
tom.beermann@agilent.com
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