Agilent Inc. (A - Analyst Report) signed an exclusive agreement with Switzerland based company Roche Holding AG (RHHBY - Analyst Report) to facilitate the transition of Roche’s NimbleGen microarray customers to Agilent’s microarray platform. Roche will be exiting the array market and is phasing out its array production and services.
It is expected that the similarity of products and services provided by the two companies will make the transition smooth and easy for Roche’s end users.
The NimbleGen microarrays from Roche are currently used in researches done on DNA, protein, tissues, antibodies and other substances.
Roche Holding is a veteran in the pharmaceuticals and diagnostics markets. Therefore, like Agilent, it also supplies test kits and instruments to various ongoing researchers worldwide. This is a positive for Agilent, which will now be able to tap some of its customers.
The agreement is testimony to Agilent’s product breadth and the flexibility of its solutions. The company has been strengthening its position in the bioanalytical testing segment with successive acquisitions. It appears that this strategy is paying off, as it is resulting in important deal wins that are helping it expand into an important and fast-growing segment.
Agilent’s revenue in the third quarter was flat sequentially and up 1.9% year over year, short of management’s expectations of a 2-3% sequential increase ($1.77 billion to $1.79 billion). The Electronic Measurement segment contributed 49.0% of revenue. The weakness was on the computing/semiconductor sides of the business.
The Life Sciences segment generated 23.0% of revenue, down 1.0% sequentially and up 2.1% from last year. The Chemical Analysis segment generated 22.0% of third quarter revenue, down 8.8% sequentially and 7.0% year over year. The sequential decline was largely because of weakness in food testing.
Currently, Agilent Technologies has a Zacks #4 Rank, implying a short-term Sell rating and Roche Holding a Zacks Rank of #2, implying a short-term Buy rating.