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Agilent (A) Q3 Earnings Beat Estimates, Revenues Fall Y/Y
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Agilent Technologies (A - Free Report) delivered third-quarter fiscal 2023 earnings of $1.43 per share, which beat the Zacks Consensus Estimate by 4.4%. The bottom line increased by 7% from the year-ago fiscal quarter’s level.
Revenues of $1.67 billion surpassed the Zacks Consensus Estimate of $1.66 billion. However, the top line was down 2.7% on a reported basis and 2.3% on a core basis from the respective year-ago fiscal quarter’s levels.
The decline was attributed to sluggishness in Chemistry & Advanced Materials and Pharma & Biopharma markets due to weak momentum in China.
Nevertheless, growth in Academia & Gov’t, Food, Environmental & Forensics and Diagnostics and Clinical markets remained a positive.
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 $927 million or 55% of its total revenues, down 9% on a reported as well as on a core basis from the respective prior-year fiscal quarter’s levels. This was due to macroeconomic uncertainties, soft market conditions in China and a sluggish pharma market. The reported figure came below the Zacks Consensus Estimate of $929 million.
ACG: Revenues from the segment were $396 million, accounting for 24% of total revenues. The figure surpassed the consensus mark of $377 million. The top line improved by 10% from the prior-year fiscal quarter’s reading on a reported basis and by 11% on a core basis, demonstrating solid momentum across all regions and end markets. A strong demand for the company’s services was a positive.
DGG: Revenues increased 3% from the prior-year fiscal quarter’s figure on a reported as well as a core basis to $349 million, accounting for the remaining 21% of total revenues. The figure came slightly below the consensus mark of $350 million. Segmental growth was attributed to strength in the NASD business. A solid demand for diagnostic tests contributed well to the company’s pathology business.
However, weakness in genomics and Resolution Bioscience businesses was a negative.
Operating Results
For the fiscal third quarter, gross margin in the LSAG segment contracted by 50 basis points (bps) to 29.9% from the prior-year fiscal quarter’s number. ACG’s gross margin expanded by 390 bps to 50.9%. DGG’s gross margin contracted by 180 bps from the year-ago fiscal quarter’s actuals to 52.2%.
Research & development (R&D) costs were $118 million, up 1.7% from the prior-year fiscal quarter’s number. Selling, general & administrative (SG&A) expenses were $407 million, down 1.2% from the year-earlier fiscal quarter’s figure. As a percentage of revenues, R&D expenses expanded by 35 bps year over year to 7.05%. SG&A expenses expanded by 40 bps year over year to 24.3%.
Operating margin for the fiscal third quarter was 7.9%, which declined significantly from 23.9% in the year-earlier fiscal quarter’s figure.
Segment-wise, the operating margin for LSAG was down 60 bps from the year-earlier fiscal quarter’s level of 29.9%. ACG’s operating margin was 32.7%, up 810 bps from the year-ago fiscal quarter’s level. DGG segment’s operating margin expanded 250 bps to 24% from the year-ago fiscal quarter’s figure.
Balance Sheet & Cash Flow
As of Jul 31, 2023, Agilent’s cash and cash equivalents were $1.33 billion, up from $1.18 billion on Apr 30, 2023.
Accounts receivables were $1.3 billion at the end of third-quarter fiscal 2023, down from $1.4 billion at the end of second-quarter fiscal 2023.
Long-term debt was $2.734 billion for the reported quarter compared with $2.733 billion in the prior fiscal quarter.
Agilent generated $562 million in cash from operations during the reported quarter, up from $398 million generated in the previous quarter.
It returned $401 million to shareholders, out of which dividend payments accounted for $66 million and share repurchases accounted for the remaining $335 million.
Guidance
For the fiscal fourth quarter of 2023, management expects revenues of $1.655-$1.705 billion, suggesting a decline between 12.2% and 9.5% on a core basis from the year-ago fiscal quarter’s actuals. The Zacks Consensus Estimate for the same is pegged at $1.84 billion.
Non-GAAP earnings per share are expected to be $1.33-$1.36. The consensus mark for fiscal fourth-quarter earnings is pinned at $1.61 per share.
For fiscal 2023, management lowered its revenue guidance to the band of $6.80-$6.85 billion from $6.93-7.03 billion, implying growth of 0.8-1.5% on a core basis from the respective fiscal 2022 figures. The Zacks Consensus Estimate for the same is pegged at $6.99 billion.
Management also lowered the guidance for fiscal 2023 non-GAAP earnings per share downward from $5.60-$5.65 to $5.40-5.43. The consensus mark for fiscal 2023 earnings is pinned at $5.61 per share.
Zacks Rank & Other Stocks to Consider
Currently, Agilent carries a Zacks Rank #3 (Hold).
BILL Holdings is set to report its fourth-quarter fiscal 2023 results on Aug 17. The Zacks Consensus Estimate for BILL’s earnings is pegged at 41 cents per share, up from a loss of 3 cents per share reported in the year-ago quarter’s figure. BILL has lost 6.4% in the year-to-date period.
NetEase is scheduled to report second-quarter 2023 results on Aug 24. The Zacks Consensus Estimate for NTES’s earnings is pinned at $1.33 per share, suggesting an increase of 9.02% from the prior-year quarter’s reported figure. NTES has gained 41.4% in the year-to-date period.
Broadcom is scheduled to report third-quarter fiscal 2023 results on Aug 31. The Zacks Consensus Estimate for AVGO’s earnings is pegged at $10.42 per share, suggesting an increase of 7.09% from the prior-year quarter’s reported figure. AVGO has gained 50.7% in the year-to-date period.
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Agilent (A) Q3 Earnings Beat Estimates, Revenues Fall Y/Y
Agilent Technologies (A - Free Report) delivered third-quarter fiscal 2023 earnings of $1.43 per share, which beat the Zacks Consensus Estimate by 4.4%. The bottom line increased by 7% from the year-ago fiscal quarter’s level.
Revenues of $1.67 billion surpassed the Zacks Consensus Estimate of $1.66 billion. However, the top line was down 2.7% on a reported basis and 2.3% on a core basis from the respective year-ago fiscal quarter’s levels.
The decline was attributed to sluggishness in Chemistry & Advanced Materials and Pharma & Biopharma markets due to weak momentum in China.
Nevertheless, growth in Academia & Gov’t, Food, Environmental & Forensics and Diagnostics and Clinical markets remained a positive.
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 $927 million or 55% of its total revenues, down 9% on a reported as well as on a core basis from the respective prior-year fiscal quarter’s levels. This was due to macroeconomic uncertainties, soft market conditions in China and a sluggish pharma market. The reported figure came below the Zacks Consensus Estimate of $929 million.
ACG: Revenues from the segment were $396 million, accounting for 24% of total revenues. The figure surpassed the consensus mark of $377 million. The top line improved by 10% from the prior-year fiscal quarter’s reading on a reported basis and by 11% on a core basis, demonstrating solid momentum across all regions and end markets. A strong demand for the company’s services was a positive.
DGG: Revenues increased 3% from the prior-year fiscal quarter’s figure on a reported as well as a core basis to $349 million, accounting for the remaining 21% of total revenues. The figure came slightly below the consensus mark of $350 million. Segmental growth was attributed to strength in the NASD business. A solid demand for diagnostic tests contributed well to the company’s pathology business.
However, weakness in genomics and Resolution Bioscience businesses was a negative.
Operating Results
For the fiscal third quarter, gross margin in the LSAG segment contracted by 50 basis points (bps) to 29.9% from the prior-year fiscal quarter’s number. ACG’s gross margin expanded by 390 bps to 50.9%. DGG’s gross margin contracted by 180 bps from the year-ago fiscal quarter’s actuals to 52.2%.
Research & development (R&D) costs were $118 million, up 1.7% from the prior-year fiscal quarter’s number. Selling, general & administrative (SG&A) expenses were $407 million, down 1.2% from the year-earlier fiscal quarter’s figure. As a percentage of revenues, R&D expenses expanded by 35 bps year over year to 7.05%. SG&A expenses expanded by 40 bps year over year to 24.3%.
Operating margin for the fiscal third quarter was 7.9%, which declined significantly from 23.9% in the year-earlier fiscal quarter’s figure.
Segment-wise, the operating margin for LSAG was down 60 bps from the year-earlier fiscal quarter’s level of 29.9%. ACG’s operating margin was 32.7%, up 810 bps from the year-ago fiscal quarter’s level. DGG segment’s operating margin expanded 250 bps to 24% from the year-ago fiscal quarter’s figure.
Balance Sheet & Cash Flow
As of Jul 31, 2023, Agilent’s cash and cash equivalents were $1.33 billion, up from $1.18 billion on Apr 30, 2023.
Accounts receivables were $1.3 billion at the end of third-quarter fiscal 2023, down from $1.4 billion at the end of second-quarter fiscal 2023.
Long-term debt was $2.734 billion for the reported quarter compared with $2.733 billion in the prior fiscal quarter.
Agilent generated $562 million in cash from operations during the reported quarter, up from $398 million generated in the previous quarter.
It returned $401 million to shareholders, out of which dividend payments accounted for $66 million and share repurchases accounted for the remaining $335 million.
Guidance
For the fiscal fourth quarter of 2023, management expects revenues of $1.655-$1.705 billion, suggesting a decline between 12.2% and 9.5% on a core basis from the year-ago fiscal quarter’s actuals. The Zacks Consensus Estimate for the same is pegged at $1.84 billion.
Non-GAAP earnings per share are expected to be $1.33-$1.36. The consensus mark for fiscal fourth-quarter earnings is pinned at $1.61 per share.
For fiscal 2023, management lowered its revenue guidance to the band of $6.80-$6.85 billion from $6.93-7.03 billion, implying growth of 0.8-1.5% on a core basis from the respective fiscal 2022 figures. The Zacks Consensus Estimate for the same is pegged at $6.99 billion.
Management also lowered the guidance for fiscal 2023 non-GAAP earnings per share downward from $5.60-$5.65 to $5.40-5.43. The consensus mark for fiscal 2023 earnings is pinned at $5.61 per share.
Zacks Rank & Other 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 BILL Holdings (BILL - Free Report) and Broadcom (AVGO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present and NetEase (NTES - Free Report) carrying a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
BILL Holdings is set to report its fourth-quarter fiscal 2023 results on Aug 17. The Zacks Consensus Estimate for BILL’s earnings is pegged at 41 cents per share, up from a loss of 3 cents per share reported in the year-ago quarter’s figure. BILL has lost 6.4% in the year-to-date period.
NetEase is scheduled to report second-quarter 2023 results on Aug 24. The Zacks Consensus Estimate for NTES’s earnings is pinned at $1.33 per share, suggesting an increase of 9.02% from the prior-year quarter’s reported figure. NTES has gained 41.4% in the year-to-date period.
Broadcom is scheduled to report third-quarter fiscal 2023 results on Aug 31. The Zacks Consensus Estimate for AVGO’s earnings is pegged at $10.42 per share, suggesting an increase of 7.09% from the prior-year quarter’s reported figure. AVGO has gained 50.7% in the year-to-date period.