Strong start to 2021, raising full-year
guidance
Highlights:
- Revenue of $1.55 billion represents an increase of 14% reported
growth year over year, up 11% on a core(1) basis.
- GAAP net income of $288 million, or 93 cents per share.
- Non-GAAP(2) net income of $328 million, or $1.06 per
share.
- Full-year guidance raised with revenue now expected to be in
the range of $5.825 billion to $5.900 billion and non-GAAP(3)
earnings per share (EPS) of $3.80 to $3.90.
- Second-quarter revenue expected to be in the range of $1.37
billion to $1.39 billion with non-GAAP(3) EPS of 78 cents to 80
cents.
- Agilent Board of Directors authorizes new $2 billion share
repurchase program.
Agilent Technologies Inc. (NYSE: A) today reported revenue of
$1.55 billion for the first quarter ended Jan. 31, 2021, an
increase of 14% compared to the first quarter of 2020 and up 11% on
a core(1) basis.
First-quarter GAAP net income was $288 million, or 93 cents per
share. This compares with $197 million, or 63 cents per share, in
the first quarter of fiscal year 2020. Non-GAAP(2) net income was
$328 million, or $1.06 per share compared with $252 million, or 81
cents per share, during the first quarter a year ago.
“Agilent’s performance in the first quarter was outstanding and
exceeded our recently increased revenue expectations,” said Mike
McMullen, Agilent president and CEO. “Our revenue growth was broad
based with all three business groups growing double-digits. The
Agilent team stayed focused, executed extremely well and increased
market share in key areas. Our ‘build and buy’ strategy is
delivering for us and the outlook for the remainder of the year is
quite strong.”
Financial Highlights
Life Sciences and Applied Markets Group
First-quarter revenue of $722 million from Agilent’s Life
Sciences and Applied Markets Group (LSAG) was up 13% year over year
and 11% on a core(1) basis. LSAG’s operating margin was 27.6%.
Agilent CrossLab Group
First-quarter revenue of $532 million from the Agilent CrossLab
Group (ACG) increased 13% year over year and was up 10% on a
core(1) basis. ACG’s operating margin was 26.7%.
Diagnostics and Genomics Group
First-quarter revenue of $294 million from Agilent’s Diagnostics
and Genomics Group (DGG) increased 18% year over year and was up
15% on a core(1) basis. DGG’s operating margin was 18.6 %.
Full-Year and Second-Quarter Outlook
Agilent has increased its outlook and now expects revenue of
$5.825 billion to $5.900 billion for fiscal year 2021. Fiscal year
2021 non-GAAP(3) earnings guidance has also increased to a range of
$3.80 to $3.90 per share.
Agilent expects second-quarter 2021 revenue in the range of
$1.37 billion to $1.39 billion. Second-quarter 2021 non-GAAP(3)
earnings are expected to be in the range of 78 cents to 80 cents
per share.
The outlook is based on currency-exchange rates as of Jan. 31,
2021.
New Share Repurchase Program
Agilent today also announced that its board of directors has
approved a new share repurchase program authorizing the repurchase
of up to $2 billion of common stock. The new share repurchase
program begins Feb. 18 and replaces the previous program. The
timing and number of shares to be repurchased will depend on
factors such as the share price, economic and market conditions,
and corporate and regulatory requirements. The share repurchase
program may be suspended, amended, or discontinued at any time.
Conference Call
Agilent’s management will present additional details regarding
the company’s first-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 “Q1 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, business model and financial results.
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 annual report on Form 10-K for the fiscal
year ended October 31, 2020. 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 Q1FY21 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. Core revenue growth rate as projected for Q2 FY21
and full fiscal year 2021 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 non-cash intangibles amortization,
transformational initiatives, acquisition and integration costs and
loss on extinguishment of debt. 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 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 $44 million per
quarter.
AGILENT TECHNOLOGIES, INC. CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS (In millions, except per share
amounts) (Unaudited) PRELIMINARY
Three Months Ended January 31,
2021
2020
Net revenue
$
1,548
$
1,357
Costs and expenses: Cost of products and services
710
634
Research and development
103
104
Selling, general and administrative
407
404
Total costs and expenses
1,220
1,142
Income from operations
328
215
Interest income
-
3
Interest expense
(19
)
(20
)
Other income (expense), net
3
21
Income before taxes
312
219
Provision for income taxes
24
22
Net income
$
288
$
197
Net income per share: Basic
$
0.94
$
0.64
Diluted
$
0.93
$
0.63
Weighted average shares used in computing net income per
share: Basic
306
310
Diluted
309
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 January
31, October 31,
2021
2020
ASSETS Current assets: Cash and cash equivalents
$
1,329
$
1,441
Accounts receivable, net
1,087
1,038
Inventory
755
720
Other current assets
312
216
Total current assets
3,483
3,415
Property, plant and equipment, net
866
845
Goodwill and other intangible assets, net
4,405
4,433
Long-term investments
165
158
Other assets
755
776
Total assets
$
9,674
$
9,627
LIABILITIES AND EQUITY Current liabilities: Accounts
payable
$
398
$
354
Employee compensation and benefits
298
367
Deferred revenue
419
386
Short-term debt
314
75
Other accrued liabilities
258
285
Total current liabilities
1,687
1,467
Long-term debt
2,185
2,284
Retirement and post-retirement benefits
389
389
Other long-term liabilities
609
614
Total liabilities
4,870
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; 305
million shares at January 31, 2021 and 306 million shares at
October 31, 2020, issued and outstanding
3
3
Additional paid-in-capital
5,266
5,311
Retained earnings
4
81
Accumulated other comprehensive loss
(469
)
(522
)
Total stockholders' equity
4,804
4,873
Total liabilities and stockholders' equity
$
9,674
$
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 Three Months Ended
January 31, January 31,
2021
2020
Cash flows from operating activities: Net income
$
288
$
197
Adjustments to reconcile net income to net cash provided by
(used in) operating activities: Depreciation and amortization
76
79
Share-based compensation
40
27
Excess and obsolete inventory related charges
6
4
Loss on extinguishment of debt
5
—
Unrealized gain on equity securities, net
—
(16
)
Other non-cash expense, net
2
2
Changes in assets and liabilities: Accounts receivable, net
(31
)
(40
)
Inventory
(35
)
(32
)
Accounts payable
43
(15
)
Employee compensation and benefits
(88
)
(80
)
Other assets and liabilities
(68
)
(185
)
Net cash provided by (used in) operating activities (a)
238
(59
)
Cash flows from investing activities: Investments in
property, plant and equipment
(41
)
(34
)
Payment to acquire fair value investments
(1
)
(1
)
Net cash used in investing activities
(42
)
(35
)
Cash flows from financing activities: Issuance of common
stock under employee stock plans
25
32
Payment of taxes related to net share settlement of equity awards
(72
)
(33
)
Payment of dividends
(59
)
(56
)
Repayment of senior notes
(105
)
—
Proceeds from credit facility
—
432
Repayment of credit facility
—
(372
)
Proceeds from commercial paper
785
—
Repayment of commercial paper
(546
)
—
Repayment of finance lease
—
(4
)
Treasury stock repurchases
(344
)
(60
)
Net cash used in financing activities
(316
)
(61
)
Effect of exchange rate movements
9
(1
)
Net decrease in cash, cash equivalents and restricted cash
(111
)
(156
)
Cash, cash equivalents and restricted cash at beginning of
period
1,447
1,388
Cash, cash equivalents and restricted cash at end of period
$
1,336
$
1,232
Reconciliation of cash, cash equivalents and
restricted cash to the condensed consolidated balance sheet:
Cash and cash equivalents
$
1,329
$
1,226
Restricted cash, included in other assets
7
6
Total cash, cash equivalents and restricted cash
$
1,336
$
1,232
(a) Cash payments included in operating activities:
Income tax payments (refunds), net
$
52
$
241
Interest payments
$
19
$
17
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,
2021
Diluted EPS
2020
Diluted EPS
GAAP net income
$
288
$
0.93
$
197
$
0.63
Non-GAAP adjustments: Intangible amortization
44
0.14
48
0.15
Transformational initiatives
11
0.04
13
0.04
Acquisition and integration costs
9
0.03
13
0.04
Loss on extinguishment of debt
5
0.02
—
—
Other
4
0.01
6
0.02
Adjustment for taxes (a)
(33
)
(0.11
)
(25
)
(0.07
)
Non-GAAP net income
$
328
$
1.06
$
252
$
0.81
(a) The adjustment for taxes excludes tax benefits that management
believes are not directly related to on-going operations and which
are either isolated or cannot be expected to occur again with any
regularity or predictability. For the three months ended January
31, 2021, management used a non-GAAP effective tax rate of 14.75%.
For the three months ended January 31, 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 amortization of intangibles, transformational initiatives,
acquisition and integration costs and loss on extinguishment of
debt.
Transformational initiatives include expenses
associated with targeted cost reduction activities such as
manufacturing transfers including costs to move manufacturing due
to new tariffs and tariff remediation actions, 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.
Other includes certain
legal costs and settlements, net unrealized gains related to our
equity securities, business exit and divestiture costs 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 Q1'21 Q1'20 Revenue
$
722
$
638
Gross Margin, %
60.5
%
60.2
%
Income from Operations
$
199
$
158
Operating margin, %
27.6
%
24.8
%
Diagnostics and Genomics Group Q1'21
Q1'20 Revenue
$
294
$
249
Gross Margin, %
51.6
%
51.7
%
Income from Operations
$
55
$
34
Operating margin, %
18.6
%
13.5
%
Agilent CrossLab Group Q1'21
Q1'20 Revenue
$
532
$
470
Gross Margin, %
51.7
%
51.8
%
Income from Operations
$
142
$
119
Operating margin, %
26.7
%
25.4
%
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 amortization of intangibles, transformational
initiatives and acquisition and integration 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 Q1'21 Q1'20 % Change
Life Sciences and Applied Markets Group
$
722
$
638
13
%
Diagnostics and Genomics Group
294
249
18
%
Agilent CrossLab Group
532
470
13
%
Agilent
$
1,548
$
1,357
14
%
Non-GAAP(excluding Acquisitions
& Divestitures) Year-over-Yearat Constant Currency
(a) Year-over-Year Year-over-Year
PercentagePoint Impactfrom Currency Current
QuarterCurrencyImpact (b) Non GAAP
Revenue by Segment Q1'21 Q1'20 %
Change % Change Life Sciences and Applied Markets
Group
$
722
$
638
13
%
11
%
2 ppts
$
16
Diagnostics and Genomics Group
294
249
18
%
15
%
3 ppts
7
Agilent CrossLab Group
532
470
13
%
10
%
3 ppts
14
Agilent (Core)
$
1,548
$
1,357
14
%
11
%
3 ppts
$
37
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: Ankur Dhingra +1 408-345-8948
ankur_dhingra@agilent.com
MEDIA CONTACT: Tom Beermann +1 408-553-2914
tom.beermann@agilent.com
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