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Agilent Financials Q2 2013

by May 27, 2013

Agilent Financials Q2 2013
Earnings and financial results

Stable sales, declining earnings despite cost-control measures.

Under difficult market conditions, sales stay relatively stable. Restructuring efforts are still to be seen, in the meantime earnings and operating cash flows are hit. Not much new investment, and cash is being returned to investors. Overall a company doing its best to compete and reward shareholders.
Macroeconomic environment expected by management to stay challenging.

Agilent Financial statements analysis

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Agilent financials for Q2 2013
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Click for larger Agilent Gross profit margin from sales , Q2 2013
Electronic Measurement revenues: down 13% YoY, with particular weakness in wireless manufacturing, operating margins: 21%.
Chemical Analysis revenues: up 3% YoY, led by growth in food markets, operating margins: 22%.
Life Sciences revenues: up 2% YoY, with continued strength in pharmaceutical markets, operating margins: 15%.
Diagnostics and Genomics revenues: +124%, down 3% excluding the effects of the Dako acquisition, operating margins: 17%.
Q3 2013 revenues are guided to be in the range of $1.63 billion to $1.66 billion. For the full FY 2013, Agilent now expects revenue of $6.75 billion to $6.85 billion.
Source: SEC filings.

Agilent financials for Q2 2013
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Click for larger Agilent Operating income from sales , Q2 2013
Despite so-called "cost control measures", operational expenses increased both YoY and QoQ. Not surprisingly, operating income declined.
Agilent announced that it has initiated a targeted restructuring program expected to reduce Agilent's total headcount by ~450 regular employees, representing approximately 2% of its global workforce. The timing was not disclosed. When completed, Agilent expects the restructuring program to result in an approximately $50 million reduction in annual operating expenses.

Agilent financials for Q2 2013
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Click for larger Agilent Net income overview , Q2 2013
Net income declined as well, albeit Agilent makes the point that during Q2, it had restructuring costs of $55 million, intangible amortization of $51 million, and acquisition, integration and transformation costs of $9 million. Agilent also recognized a tax benefit of $18 million. Excluding these items and $6 million of other net charges, Agilent would have reported second-quarter adjusted net income of $269 million, or $0.77 per share (just a little higher YoY with all these adjustments).

Agilent financials for Q2 2013
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Click for larger Agilent Detailed revenues and costs , Q2 2013
Detailed revenues and costs, in line with above considerations.

Agilent financials for Q2 2013
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Click for larger Agilent Balance sheet overview , Q2 2013
Financial position ok, with decreasing long-term liabilities.

Agilent financials for Q2 2013
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Click for larger Agilent Detailed current assets , Q2 2013
Cash coffers are being refiled.

Agilent financials for Q2 2013
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Click for larger Agilent Detailed long term assets , Q2 2013
No new acquisition so far.

Agilent financials for Q2 2013
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Click for larger Agilent Detailed current liabilities , Q2 2013
A notable increase in compensation, we do not really see here here any restructuring.

Agilent financials for Q2 2013
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Click for larger Agilent Detailed long term liabilities , Q2 2013
Long term debt stable, retirement benefits down.

Agilent financials for Q2 2013
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Click for larger Agilent Detailed equity components , Q2 2013
Share repurchase program continues unabated, and even increases.
Agilent announced its board of directors has authorized an increase of $500 million to its existing stock repurchase program. During the Q1 2013, Agilent purchased 2 million shares of common stock, and in the second quarter, 3.3 million shares were purchased. Under the increased program, approximately $781 million of stock remains to be repurchased.

Agilent financials for Q2 2013
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Click for larger Agilent Cash flows overview , Q2 2013
Cash flows has no surprises: operating cash flow so-so but positive, in line with earnings, and it is used mostly for share buybacks.

Agilent financials for Q2 2013
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Click for larger Agilent Detailed operating cash flows , Q2 2013
Operating cash flows details show no surprises: largest component is net income adjusted with depreciation and amortization.

Agilent financials for Q2 2013
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Click for larger Agilent Detailed financing cash flows , Q2 2013
Financing cash flows details: increased dividend, and much more share repurchases.

Agilent financials for Q2 2013
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Click for larger Agilent Detailed investment cash flows , Q2 2013
Really not much in new property plant and equipment; management running out of new ideas? Anyway giving back cash to shareholders seems a bright idea until macroeconomic conditions improve.
Closing remarks on Agilent financials for Q2 2013:
We like those financials, they show a company under stress which is doing its best to stay relevant and reward shareholders. So far it\s working, albeit not spectacularly.

Data sources: Our an analysis is based on Agilent quarterly and annual reports as filed to SEC EDGAR or reported by Agilent. All data is thoroughly processed by our analysts to assure consistent and comparable figures across many quarters. In case you spot any error or inconsistency, please let us know.

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