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Will New Technologies Benefit Agilent (A) in Q4 Earnings?

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Agilent Technologies (A - Free Report) is set to report fiscal fourth-quarter 2018 results on Nov 19. In the last reported quarter, the company delivered a positive earnings surprise of 6.35%.

Agilent’s surprise history has been pretty impressive. It beat estimates in three of the trailing four quarters, with average positive earnings surprise of 6.62%.

Notably, on a year-to-date basis, Agilent’s shares have lost 5.2% compared with the industry’s decline of 4.8%.

 

 

Let’s see how things are shaping up for this announcement.

Strength in ACG Segment to Drive Revenues

In the last reported quarter, revenues from the Agilent Cross Lab Group (ACG) came in at $426 million. Both services and consumables recorded growth across all geographical regions.

The figure is expected to further increase in the to-be-reported quarter, driven by strength in services and consumables across all geographical regions.

Strength in DGG & LSAG

In the last reported quarter, revenues from the company’s Diagnostics and Genomics Group (DGG) came in at $237 million, up on a year-over-year basis, driven by strength in genomics. The segment is also expected to perform well in the soon-to-be-reported quarter.

Also, the Life Sciences & Applied Markets Group (LSAG) segment is likely to perform well, driven by strong performances in chemical and energy, as well as pharma and environmental markets.

Other Growth Drivers

Agilent is a broad-based OEM of test and measurement equipment. The company shifted its focus on life sciences, genomics, diagnostics and wireless test markets, wherein it has made a few important acquisitions, and alliances.

Agilent’s broad-based portfolio and increased focus on its segments offer higher growth potential. The company’s decision to divest/wind up underperforming businesses has enhanced its focus on the new Agilent, while enabling expansion of a solid recurring revenue base, along with the diversification of geographic and industrial operations for growth. Also, the company’s focus on aligning investments toward more attractive growth avenues and innovative product launches is a positive.

What Our Model Suggests

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP.

Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if these have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Agilent currently has a Zacks Rank #3 and an Earnings ESP of -0.45%, a combination that makes surprise prediction difficult this time around.

Stocks to Consider

We see a likely earnings beat for each of the following companies:

NetApp, Inc. (NTAP - Free Report) has an Earnings ESP of +0.73% and a Zacks Rank #2.

Semtech Corporation (SMTC - Free Report) has an Earnings ESP of +1.64% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

VMware, Inc. has an Earnings ESP of +0.55% and a Zacks Rank #3.

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