Agilent Technologies Reports First-Quarter 2016 Results
First-quarter GAAP income from continuing operations was \\$123 million, or \\$0.37 per share. Last year's first-quarter GAAP income from continuing operations was \\$93 million, or \\$0.28 per share.
During the first quarter, Agilent had intangible amortization of \\$43 million, transformation costs of \\$11 million, acquisition and integration costs of \\$5 million, a pension curtailment gain of \\$16 million, and \\$6 million of other costs. Excluding those items, and a tax benefit of \\$19 million, Agilent reported first-quarter adjusted income from continuing operations of \\$153 million, \\$0.46 per share(1).
Agilent's adjusted operating margin was 20.2%(4) for the first quarter, up 200 basis points over a year ago.
"Agilent delivered a strong start to the year," said Mike McMullen, Agilent president and CEO. "Revenue and earnings per share exceeded our guidance range, reflecting the strength of Agilent's products, services and relationships with customers in our markets."
"We are building a business that can drive sustainable growth, expand operating margins and provide long-term value to our shareholders," he added.
First-quarter revenue of \\$526 million from Agilent's Life Sciences and Applied Markets Group (LSAG) declined 4 percent year over year (up 2 percent on a core basis(3)). Robust growth in pharma was offset by softness in the applied markets. LSAG's Q1 operating margin was 21.7 percent.
First-quarter revenue of \\$344 million from the Agilent CrossLab Group (ACG) grew 4 percent year over year (up 10 percent on a core basis(3)). Both services and consumables continued to see solid growth worldwide. ACG's operating margin was 22.1 percent for the quarter.
First-quarter revenue of \\$158 million from Agilent's Diagnostics and Genomics Group (DGG) increased 7 percent year over year (up 12 percent on a core basis(3)), reflecting momentum across all of its businesses. DGG's operating margin for the quarter was 9.6 percent.
Agilent expects second-quarter 2016 revenue in the range of \\$965 million to \\$985 million. Second-quarter non-GAAP earnings are expected to be in the range of \\$0.37 to \\$0.39 per share(2).
For fiscal year 2016, Agilent expects revenue of \\$4.10 billion to \\$4.12 billion and non-GAAP earnings of \\$1.81 to \\$1.87 per share(2). The guidance is based on Jan. 29, 2016, exchange rates.
About Agilent Technologies
Agilent Technologies Inc. (NYSE: A), a global leader in life sciences, diagnostics and applied chemical markets, is the premier laboratory partner for a better world. Agilent works with customers in more than 100 countries, providing instruments, software, services and consumables for the entire laboratory workflow. Agilent generated revenue of \\$4.04 billion in fiscal 2015. The company employs about 12,000 people worldwide. Information about Agilent is available at www.agilent.com.
Agilent's management will present more details about its first-quarter FY2016 financial results on a conference call with investors today at 1:30 p.m. PT. This event will be webcast live in listen-only mode. Listeners may log on at www.investor.agilent.com and select "Q1 2016 Agilent Technologies Inc. Earnings Conference Call" in the "News & Events Calendar of Events" section. The webcast will remain available on the company's website for 90 days.
Additional information regarding financial results can be found at www.investor.agilent.com by selecting "Financial Results" in the "Financial Information" section.
A telephone replay of the conference call will be available at approximately 4:30 p.m. PT today through Feb. 23 by dialing +1 855 859 2056 (or +1 404 537 3406 from outside the United States) and entering passcode 24914313.
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 future revenue, earnings and profitability; planned new products; market trends; the future demand for the company's products and services; customer expectations; and revenue and non-GAAP earnings guidance for the second quarter and full fiscal year 2016. 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 our 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 we are 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 our cost-cutting initiatives will impair our ability to develop products and remain competitive and to operate effectively; the impact of geopolitical uncertainties and global economic conditions on our operations, our markets and our ability to conduct business; the ability to improve asset performance to adapt to changes in demand; the ability of our 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 our annual report on Form 10-K for the year ended Oct. 31, 2015. 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) Non-GAAP income from continuing operations and non-GAAP income from continuing operations per share exclude primarily the impacts of acquisition and integration costs, transformation initiatives, pension curtailment gain, business exit and divestiture costs, and non-cash intangibles amortization. We also exclude any tax benefits that are not directly related to ongoing operations and which are either isolated or cannot be 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 5 of the attached tables along with additional information regarding the use of this non-GAAP measure.
(2) Non-GAAP earnings per share as projected for Q2 FY16 and full fiscal year 2016 excludes primarily the future impact of acquisition and integration costs, pension curtailment gain, business exit and divestiture costs and non-cash intangibles amortization. We also exclude any tax benefits that are not directly related to ongoing operations and which are either isolated or cannot be 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. Therefore, no reconciliation to GAAP amounts has been provided. Future amortization of intangibles is expected to be approximately \\$42 million per quarter.
(3) Core revenue excludes the impact of currency, the NMR business and acquisitions and divestitures within the past 12 months. Core revenue is a non-GAAP measure. A reconciliation between GAAP revenue and core revenue is set forth on page 7 of the attached tables along with additional information regarding the use of this non-GAAP measure.
(4) Adjusted operating margin is a non-GAAP measure and excludes primarily the impacts of acquisition and integration costs, transformation initiatives, pension curtailment gain, business exit and divestiture costs, and non-cash intangibles amortization in addition to the costs related to services Agilent is providing to Keysight post separation. A reconciliation is set forth on page 8 of the attached tables along with additional information regarding the use of this non-GAAP measure.