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Agilent Technologies (A - Free Report) reported second-quarter fiscal 2022 earnings of $1.13 per share, beating the Zacks Consensus Estimate by 1.8%. The bottom line increased 16.5% year over year.
Revenues of $1.61 billion lagged the Zacks Consensus Estimate by 0.3%. The top line was up 5% on a reported basis and 7% on a core basis from the year-ago quarter’s level.
The top-line growth was driven by continued strong growth in the pharma market. Also, solid momentum in the chemical & energy market remained a positive.
In terms of major markets, Analytical Laboratory and Dx & Clinical accounted for 85% and 15% of total revenues each, up 8% and 5% on a core basis, respectively, from the corresponding prior-year quarter’s readings.
However, lockdowns in China due to the coronavirus pandemic and the conflict in Ukraine remained headwinds during the fiscal second quarter.
Agilent Technologies, Inc. Price, Consensus and EPS Surprise
Agilent has three reporting segments, namely Life Sciences & Applied Markets Group (LSAG), Agilent Cross Lab Group (ACG), and Diagnostics and Genomics Group (DGG).
LSAG: The segment accounted for $896 million or 56% of its total revenues, up 2% on a reported basis and 4% on a core basis from the respective prior-year quarter’s levels. This was driven by a positive environment across key end-markets served, especially the Pharma and Chemical & Energy market. However, shutdowns in China affected the instrument platforms. Nevertheless, growth in other platforms and cell analysis aided the results.
ACG: Revenues from the segment were $353 million, accounting for 22% of total revenues. Also, the top line improved 7% year over year on a reported basis and 10% on a core basis, driven by strong demand for services on BioPharma and LC-MS platforms. Also, solid contract revenue growth across the portfolio remained a tailwind.
DGG: Revenues increased 14% year over year on a reported basis and 15% on a core basis to $358 million, accounting for the remaining 22% of total revenues. Top-line growth was attributed to the strength in NASD and genomics businesses.
Operating Results
For the fiscal second quarter, gross margin in the LSAG segment contracted 90 basis points (bps) on a year-over-year basis to 59%. DGG gross margin expanded 260 bps on a year-over-year basis to 56%. ACG gross margin expanded 180 bps to 47.1%.
Research & development costs were $115 million, up 5.5% year over year. Selling, general & administrative expenses were $386 million, which decreased 8.1% year over year.
Operating margin for the fiscal second quarter was 25.3%, which expanded 140 bps on a year-over-year basis.
Segment-wise, operating margin for LSAG was down 20 bps year over year to 25.5%. The DGG segment’s operating margin expanded 360 bps on a year-over-year basis to 25.5%. ACG operating margin was 24.6%, which expanded 360 bps from the year-ago quarter’s level.
Balance Sheet
As of Apr 30, 2022, Agilent’s cash and cash equivalents were $1.19 billion, up from $1.11 billion on Jan 31, 2022.
Accounts receivables were $1.24 billion at the end of fiscal second-quarter 2022, up from $1.21 billion at the end of first-quarter fiscal 2022.
Further, long-term debt was $2.730 billion for the reported quarter, in line with the prior quarter’s figure.
Outlook
For the fiscal third quarter, management expects revenues of $1.625-$1.650 billion, suggesting growth between 7.2% and 8.8% on a core basis from the year-ago actuals. The Zacks Consensus Estimate for revenues stands at $1.66 billion.
Non-GAAP earnings per share are expected to be $1.20-1.22. The Zacks Consensus Estimate for earnings is pegged at $1.20 per share.
For fiscal 2022, management anticipates revenues in the band of $6.67-$6.73 billion, implying growth of 5.6-6.5% on a reported basis and 8-9% on a core basis from the fiscal 2021 tally. The Zacks Consensus Estimate for full-year revenues is pegged at $6.71 billion.
Further, management raised its guidance for non-GAAP earnings per share from $4.80-$4.90 to $4.86-$4.93. The Zacks Consensus Estimate for earnings is pegged at $4.86 per share.
Zacks Rank & Stocks to Consider
Currently, Agilent carries a Zacks Rank #3 (Hold). Investors interested in the broader technology sector can consider some better-ranked stocks like Avnet (AVT - Free Report) , Monolithic Power Systems (MPWR - Free Report) and MaxLinear (MXL - Free Report) . While Avnet and Monolithic Power Systems sport a Zacks Rank #1 (Strong Buy), MaxLinear carries a Zacks Rank #2 (Buy) at present.You can see the complete list of today’s Zacks #1 Rank stocks here.
Avnet has gained 4.5% in the past year. The long-term earnings growth rate for AVT is currently projected at 37.2%.
Monolithic Power Systems has gained 28.4% in the past year. The long-term earnings growth rate for MPWR is currently projected at 25%.
MaxLinear has rallied 7.5% in the past year. The long-term earnings growth rate for MXL is currently projected at 20%.
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Agilent (A) Q2 Earnings Surpass Estimates, Revenues Rise Y/Y
Agilent Technologies (A - Free Report) reported second-quarter fiscal 2022 earnings of $1.13 per share, beating the Zacks Consensus Estimate by 1.8%. The bottom line increased 16.5% year over year.
Revenues of $1.61 billion lagged the Zacks Consensus Estimate by 0.3%. The top line was up 5% on a reported basis and 7% on a core basis from the year-ago quarter’s level.
The top-line growth was driven by continued strong growth in the pharma market. Also, solid momentum in the chemical & energy market remained a positive.
In terms of major markets, Analytical Laboratory and Dx & Clinical accounted for 85% and 15% of total revenues each, up 8% and 5% on a core basis, respectively, from the corresponding prior-year quarter’s readings.
However, lockdowns in China due to the coronavirus pandemic and the conflict in Ukraine remained headwinds during the fiscal second quarter.
Agilent Technologies, Inc. Price, Consensus and EPS Surprise
Agilent Technologies, Inc. price-consensus-eps-surprise-chart | Agilent Technologies, Inc. Quote
Segmental Top-Line Details
Agilent has three reporting segments, namely Life Sciences & Applied Markets Group (LSAG), Agilent Cross Lab Group (ACG), and Diagnostics and Genomics Group (DGG).
LSAG: The segment accounted for $896 million or 56% of its total revenues, up 2% on a reported basis and 4% on a core basis from the respective prior-year quarter’s levels. This was driven by a positive environment across key end-markets served, especially the Pharma and Chemical & Energy market. However, shutdowns in China affected the instrument platforms. Nevertheless, growth in other platforms and cell analysis aided the results.
ACG: Revenues from the segment were $353 million, accounting for 22% of total revenues. Also, the top line improved 7% year over year on a reported basis and 10% on a core basis, driven by strong demand for services on BioPharma and LC-MS platforms. Also, solid contract revenue growth across the portfolio remained a tailwind.
DGG: Revenues increased 14% year over year on a reported basis and 15% on a core basis to $358 million, accounting for the remaining 22% of total revenues. Top-line growth was attributed to the strength in NASD and genomics businesses.
Operating Results
For the fiscal second quarter, gross margin in the LSAG segment contracted 90 basis points (bps) on a year-over-year basis to 59%. DGG gross margin expanded 260 bps on a year-over-year basis to 56%. ACG gross margin expanded 180 bps to 47.1%.
Research & development costs were $115 million, up 5.5% year over year. Selling, general & administrative expenses were $386 million, which decreased 8.1% year over year.
Operating margin for the fiscal second quarter was 25.3%, which expanded 140 bps on a year-over-year basis.
Segment-wise, operating margin for LSAG was down 20 bps year over year to 25.5%. The DGG segment’s operating margin expanded 360 bps on a year-over-year basis to 25.5%. ACG operating margin was 24.6%, which expanded 360 bps from the year-ago quarter’s level.
Balance Sheet
As of Apr 30, 2022, Agilent’s cash and cash equivalents were $1.19 billion, up from $1.11 billion on Jan 31, 2022.
Accounts receivables were $1.24 billion at the end of fiscal second-quarter 2022, up from $1.21 billion at the end of first-quarter fiscal 2022.
Further, long-term debt was $2.730 billion for the reported quarter, in line with the prior quarter’s figure.
Outlook
For the fiscal third quarter, management expects revenues of $1.625-$1.650 billion, suggesting growth between 7.2% and 8.8% on a core basis from the year-ago actuals. The Zacks Consensus Estimate for revenues stands at $1.66 billion.
Non-GAAP earnings per share are expected to be $1.20-1.22. The Zacks Consensus Estimate for earnings is pegged at $1.20 per share.
For fiscal 2022, management anticipates revenues in the band of $6.67-$6.73 billion, implying growth of 5.6-6.5% on a reported basis and 8-9% on a core basis from the fiscal 2021 tally. The Zacks Consensus Estimate for full-year revenues is pegged at $6.71 billion.
Further, management raised its guidance for non-GAAP earnings per share from $4.80-$4.90 to $4.86-$4.93. The Zacks Consensus Estimate for earnings is pegged at $4.86 per share.
Zacks Rank & Stocks to Consider
Currently, Agilent carries a Zacks Rank #3 (Hold). Investors interested in the broader technology sector can consider some better-ranked stocks like Avnet (AVT - Free Report) , Monolithic Power Systems (MPWR - Free Report) and MaxLinear (MXL - Free Report) . While Avnet and Monolithic Power Systems sport a Zacks Rank #1 (Strong Buy), MaxLinear carries a Zacks Rank #2 (Buy) at present.You can see the complete list of today’s Zacks #1 Rank stocks here.
Avnet has gained 4.5% in the past year. The long-term earnings growth rate for AVT is currently projected at 37.2%.
Monolithic Power Systems has gained 28.4% in the past year. The long-term earnings growth rate for MPWR is currently projected at 25%.
MaxLinear has rallied 7.5% in the past year. The long-term earnings growth rate for MXL is currently projected at 20%.