Delivers Strong, Broad-Based Growth
Raising Full-Year Outlook on
Continued Company Momentum
Highlights:
- Revenue of $1.525 billion represents an increase of 23%
reported growth year-over-year, up 19% on a core(1) basis.
- GAAP net income of $216 million, or 70 cents per share.
- Non-GAAP(2) net income of $299 million, or 97 cents per
share.
- Completed the Resolution Bioscience acquisition.
- Full-year guidance raised with revenue now expected to be in
the range of $6.15 billion to $6.21 billion and non-GAAP(3)
earnings per share (EPS) of $4.09 to $4.14.
- Third-quarter revenue expected to be in the range of $1.51
billion to $1.54 billion with non-GAAP(3) EPS of 97 cents to 99
cents.
Agilent Technologies Inc. (NYSE: A) today reported revenue of
$1.525 billion for the second quarter ended April 30, 2021, an
increase of 23% compared to the second quarter of 2020 and up 19%
on a core(1) basis.
Second-quarter GAAP net income was $216 million, or 70 cents per
share. This compares with $101 million, or 32 cents per share, in
the second quarter of fiscal year 2020. Non-GAAP(2) net income was
$299 million, or 97 cents per share compared with $223 million, or
71 cents per share, during the second quarter a year ago.
“The Agilent team delivered an exceptional quarter, exceeding
our revenue and earnings expectations as our growth momentum
continues,” said Mike McMullen, Agilent president and CEO. “Our
very strong growth is broad-based across all end-markets,
geographies and business groups. These results reflect our
relentless customer focus, innovative solutions, and excellent
operational execution. Due to our strong-second quarter performance
and expected continued momentum, we are raising our revenue and
earnings outlook for the full year.
“We also welcomed the Resolution Bioscience team to Agilent in
Q2, continuing our investment in high-growth markets as part of our
‘build and buy’ growth strategy.”
Financial Highlights
Life Sciences and Applied Markets Group
Second-quarter revenue of $674 million from Agilent’s Life
Sciences and Applied Markets Group (LSAG) increased 28%
year-over-year and was up 25% on a core(1) basis. LSAG’s operating
margin was 22.9%.
Agilent CrossLab Group
Second-quarter revenue of $536 million from the Agilent CrossLab
Group (ACG) increased 19% year-over-year and was up 15% on a
core(1) basis. ACG’s operating margin was 26.3%.
Diagnostics and Genomics Group
Second-quarter revenue of $315 million from Agilent’s
Diagnostics and Genomics Group (DGG) increased 20% year-over-year
and was up 16% on a core(1) basis. DGG’s operating margin was
21.9%.
Full-Year and Third-Quarter Outlook
Agilent has increased its outlook and now expects revenue in the
range of $6.15 billion to $6.21 billion for fiscal year 2021.
Fiscal year 2021 non-GAAP(3) earnings guidance has also increased
to a range of $4.09 to $4.14 per share.
Agilent expects third-quarter 2021 revenue in the range of $1.51
billion to $1.54 billion, with non-GAAP(3) earnings expected to be
in the range of 97 to 99 cents per share.
The outlook is based on currency-exchange rates as of April 30,
2021.
Conference Call
Agilent’s management will present additional details regarding
the company’s second-quarter 2021 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 “Q2 2021 Agilent Technologies Inc. Earnings
Conference Call” link in the “News & Events -- Events” portion
of the Investor Relations section of the Agilent 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 life
sciences, diagnostics, and applied chemical markets, delivering
insight and innovation toward improving the quality of life.
Agilent instruments, software, services, solutions, and people
provide trusted answers to customers' most challenging questions.
The company generated revenue of $5.34 billion in fiscal year 2020
and employs 16,400 people worldwide. Information about Agilent is
available at www.agilent.com. To receive the latest Agilent news,
please subscribe to the Agilent Newsroom. Follow Agilent on
LinkedIn, Twitter, 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 and strategy, business, financial
results, revenue and non-GAAP earnings guidance for the third
quarter and full fiscal year 2021 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; the adverse impacts of and risks posed
by the COVID-19 pandemic and other risks detailed in Agilent’s
filings with the Securities and Exchange Commission, including its
quarterly report on Form 10-Q for the quarter ended January 31,
2021. 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. A reconciliation between Q2 FY21
GAAP revenue and core revenue is set forth on page 6 of the
attached tables along with additional information regarding the use
of this non-GAAP measure.
(2) Non-GAAP net income and non-GAAP earnings per share
primarily exclude the impacts of non-cash asset impairments,
intangibles amortization, transformational initiatives, acquisition
and integration costs, loss on extinguishment of debt and business
exit and divestiture 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. 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 Q3 FY21 and
full fiscal year 2021 exclude primarily the 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 $49 million per
quarter.
AGILENT TECHNOLOGIES, INC. CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS (In millions, except per share
amounts) (Unaudited) PRELIMINARY
Three Months Ended
Six Months Ended
April 30,
April 30,
2021
2020
2021
2020
Net revenue
$
1,525
$
1,238
$
3,073
$
2,595
Costs and expenses: Cost of products and services
708
581
1,418
1,215
Research and development
109
197
212
301
Selling, general and administrative
420
358
827
762
Total costs and expenses
1,237
1,136
2,457
2,278
Income from operations
288
102
616
317
Interest income
1
3
1
6
Interest expense
(20
)
(20
)
(39
)
(40
)
Other income (expense), net
4
36
7
57
Income before taxes
273
121
585
340
Provision for income taxes
57
20
81
42
Net income
$
216
$
101
$
504
$
298
Net income per share: Basic
$
0.71
$
0.33
$
1.65
$
0.96
Diluted
$
0.70
$
0.32
$
1.64
$
0.95
Weighted average shares used in computing net income per
share: Basic
304
309
305
310
Diluted
307
312
308
313
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 amounts)
(Unaudited) PRELIMINARY April
30, October 31,
2021
2020
ASSETS Current assets: Cash and cash equivalents
$
1,380
$
1,441
Accounts receivable, net
1,075
1,038
Inventory
791
720
Other current assets
268
216
Total current assets
3,514
3,415
Property, plant and equipment, net
884
845
Goodwill and other intangible assets, net
5,059
4,433
Long-term investments
188
158
Other assets
753
776
Total assets
$
10,398
$
9,627
LIABILITIES AND EQUITY Current liabilities: Accounts
payable
$
423
$
354
Employee compensation and benefits
386
367
Deferred revenue
429
386
Short-term debt
205
75
Other accrued liabilities
315
285
Total current liabilities
1,758
1,467
Long-term debt
2,727
2,284
Retirement and post-retirement benefits
377
389
Other long-term liabilities
726
614
Total liabilities
5,588
4,754
Total Equity: Stockholders' equity: Preferred stock; $0.01
par value; 125 million shares authorized; none issued and
outstanding
—
—
Common stock; $0.01 par value, 2 billion shares authorized; 303
million shares at April 30, 2021 and 306 million shares at October
31, 2020, issued and outstanding
3
3
Additional paid-in-capital
5,271
5,311
Retained earnings (accumulated deficit)
(12
)
81
Accumulated other comprehensive loss
(452
)
(522
)
Total stockholders' equity
4,810
4,873
Total liabilities and stockholders' equity
$
10,398
$
9,627
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 Six Months Ended April
30, April 30,
2021
2020
Cash flows from operating activities: Net income
$
504
$
298
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
153
155
Share-based compensation
66
44
Excess and obsolete inventory related charges
14
9
Loss on extinguishment of debt
17
—
Asset impairment charges
2
99
Unrealized gain on equity securities, net
(11
)
(27
)
Other non-cash expenses, net
2
3
Changes in assets and liabilities: Accounts receivable, net
(17
)
25
Inventory
(80
)
(85
)
Accounts payable
51
(10
)
Employee compensation and benefits
(3
)
(50
)
Other assets and liabilities
12
(207
)
Net cash provided by operating activities (a)
710
254
Cash flows from investing activities: Investments in
property, plant and equipment
(72
)
(67
)
Acquisition of businesses and intangible assets, net of cash
acquired
(547
)
—
Payment to acquire fair value investments
(8
)
(18
)
Payment in exchange for convertible note
(2
)
(3
)
Net cash used in investing activities
(629
)
(88
)
Cash flows from financing activities: Issuance of common
stock under employee stock plans
26
32
Payment of taxes related to net share settlement of equity awards
(73
)
(33
)
Issuance of senior notes
848
—
Debt issuance costs
(7
)
—
Payment of dividends
(118
)
(111
)
Repayment of senior notes
(417
)
—
Proceeds from commercial paper
1,232
—
Repayment of commercial paper
(1,102
)
—
Proceeds from credit facility
—
798
Repayment of credit facility
—
(713
)
Repayment of finance lease
—
(4
)
Treasury stock repurchases
(539
)
(186
)
Net cash used in financing activities
(150
)
(217
)
Effect of exchange rate movements
9
(8
)
Net decrease in cash, cash equivalents and restricted cash
(60
)
(59
)
Cash, cash equivalents and restricted cash at beginning of
period
1,447
1,388
Cash, cash equivalents and restricted cash at end of period
$
1,387
$
1,329
Reconciliation of cash, cash equivalents and
restricted cash to the condensed consolidated balance sheet:
Cash and cash equivalents
$
1,380
$
1,324
Restricted cash, included in other assets
7
5
Total cash, cash equivalents and restricted cash
$
1,387
$
1,329
(a) Cash payments included in operating activities:
Income tax payments (refunds), net
$
116
$
286
Interest payments
$
36
$
39
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
Six Months Ended
April 30,
April 30,
2021
Diluted EPS
2020
Diluted EPS
2021
Diluted EPS
2020
Diluted EPS
GAAP net income
$
216
$
0.70
$
101
$
0.32
$
504
$
1.64
$
298
$
0.95
Non-GAAP adjustments: Asset impairments
2
0.01
99
0.32
2
0.01
99
0.32
Intangible amortization
46
0.15
46
0.15
90
0.29
94
0.30
Transformational initiatives
9
0.03
15
0.05
20
0.06
28
0.09
Acquisition and integration costs
13
0.04
11
0.03
22
0.07
24
0.08
Loss on extinguishment of debt
12
0.04
—
—
17
0.06
—
—
Business exit and divestiture costs
3
0.01
—
—
4
0.01
—
—
Other
(8
)
(0.03
)
(29
)
(0.09
)
(5
)
(0.02
)
(23
)
(0.08
)
Adjustment for taxes (a)
6
0.02
(20
)
(0.07
)
(27
)
(0.09
)
(45
)
(0.14
)
Non-GAAP net income
$
299
$
0.97
$
223
$
0.71
$
627
$
2.03
$
475
$
1.52
(a) The adjustment for taxes excludes tax expense
(benefits) that management believes are not directly related to
ongoing operations and which are either isolated or cannot be
expected to occur again with any regularity or predictability. For
the three and six months ended April 30, 2021, management used a
non-GAAP effective tax rate of 14.75%. For the three and six months
ended April 30, 2020, management used a non-GAAP effective tax rate
of 15.50%. 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 asset impairments,
amortization of intangibles, transformational initiatives,
acquisition and integration costs, loss on extinguishment of debt
and business exit and divestiture costs.
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.
Loss on
extinguishment of debt relates to the net loss recorded on the
redemption of $100 million of the $400 million outstanding 3.2%
2022 senior notes due on October 1, 2022, called on December 22,
2020 and settled on January 21, 2021 and the net loss recorded on
the redemption of the remaining $300 million called on March 5,
2021 and settled on April 5, 2021.
Business exit and divestiture
costs include costs associated with business divestitures.
Other includes certain legal costs and settlements, net
unrealized gains related to our equity securities and acceleration
of share-based compensation expense 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 Q2'21 Q2'20 Revenue
$
674
$
526
Gross Margin, %
59.4
%
58.1
%
Income from Operations
$
154
$
98
Operating margin, %
22.9
%
18.7
%
Diagnostics and Genomics Group Q2'21
Q2'20 Revenue
$
315
$
263
Gross Margin, %
53.4
%
55.1
%
Income from Operations
$
69
$
57
Operating margin, %
21.9
%
21.6
%
Agilent CrossLab Group Q2'21
Q2'20 Revenue
$
536
$
449
Gross Margin, %
51.6
%
52.5
%
Income from Operations
$
141
$
122
Operating margin, %
26.3
%
27.2
%
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 asset impairments,
amortization of intangibles, transformational initiatives,
acquisition and integration costs and business exit and divestiture
costs. 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 Q2'21
Q2'20 % Change Life Sciences and Applied
Markets Group
$
674
$
526
28%
Diagnostics and Genomics Group
315
263
20%
Agilent CrossLab Group
536
449
19%
Agilent
$
1,525
$
1,238
23%
Non-GAAP(excluding Acquisitions
& Divestitures) Year-over-Yearat Constant Currency
(a) Year-over-Year Year-over-Year Percentage
Point Impact from Currency Current Quarter CurrencyImpact
(b) Non GAAP Revenue by
Segment Q2'21 Q2'20 % Change %
Change Life Sciences and Applied Markets Group
$
674
$
526
28%
25%
3 ppts
$
18
Diagnostics and Genomics Group
315
263
20%
16%
4 ppts
9
Agilent CrossLab Group
536
449
19%
15%
4 ppts
21
Agilent (Core)
$
1,525
$
1,238
23%
19%
4 ppts
$
48
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: Ruben DiRado +1 408-345-8971
Ruben_dirado@agilent.com Media Contact: Tom Beermann +1
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