Back to top

Will New Technologies Benefit Agilent (A) in Q3 Earnings?

Read MoreHide Full Article

Agilent Technologies (A - Free Report) is set to report fiscal third-quarter 2018 results on Aug 14. In the last reported quarter, the company delivered in-line results.

The company’s surprise history has been pretty impressive. It beat estimates in three of the trailing four quarters, with an average positive earnings surprise of 8.40%.

Notably, on a 12-month basis, Agilent’s shares have returned 15%, underperforming the industry’s rally of 19.1%.

 

 

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 witnessed growth. Food led growth across all regions and major end-markets.

The figure is expected to further increase in the to-be-reported quarter, driven by strength in services and consumables across all geographical regions. The Zacks Consensus Estimate for the quarter to be reported is pegged at $430 million.

Strength in DGG & LSAG Serves as a Big Positive

In the last reported quarter, revenues from the company’s Diagnostics and Genomics Group (DGG) came in at $219 million, up year over year driven by strength in pharma, diagnostic and clinical end-markets. All businesses under this group (Dako, Genomics and Nucleic Acid Solutions) performed well. The segment is also expected to perform well in the soon-to-be-reported quarter. The Zacks Consensus Estimate for the fiscal third quarter is pegged at $220 million.

The Life Sciences & Applied Markets Group (LSAG) segment is expected to perform well in the quarter, driven by strong performances in chemical and energy, as well as pharma and environmental markets. The Zacks Consensus Estimate for the fiscal third quarter is pegged at $570 million.

Other Growth Drivers

Agilent is a broad-based OEM of test and measurement equipment. The company shifted its focus to life sciences, genomics, diagnostics and wireless test markets, in which 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, and 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 has a Zacks Rank #2 and an Earnings ESP of +1.15%, a combination suggests that the company is likely to beat estimates this time around.

Other Stocks to Consider

In addition to Agilent, we see a likely earnings beat for each of the following companies:

Vishay Intertechnology, Inc. (VSH - Free Report) has an Earnings ESP of +4.52% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Avnet, Inc. (AVT - Free Report) has an Earnings ESP of +1.37% and a Zacks Rank #2.

Applied Materials (AMAT - Free Report) has an Earnings ESP of +0.95% and a Zacks Rank #3.

The Hottest Tech Mega-Trend of All                

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>



More from Zacks Analyst Blog

You May Like

Published in