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Agilent (A) Q2 Earnings Beat Estimates, Revenues Fall Y/Y
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Agilent Technologies (A - Free Report) delivered second-quarter fiscal 2024 earnings of $1.22 per share, which beat the Zacks Consensus Estimate by 2.5%. However, the bottom line decreased 4% from the year-ago quarter.
Revenues of $1.57 billion lagged the Zacks Consensus Estimate by 0.5%. The top line declined 8.4% on a reported basis and 7.4% on a core basis from the year-ago quarter.
The decline was attributed to broad-based weakness across all end markets, especially in the Pharma, Food, and Academic and Government markets.
Weak momentum in China was another concern.
Segmental Top-Line Details
Agilent has three reporting segments — Life Sciences & Applied Markets Group (“LSAG”), Agilent Cross Lab Group (“ACG”), and Diagnostics and Genomics Group (“DGG”).
LSAG: The segment accounted for $754 million or 48% of the company’s total revenues, down 14% on a reported basis and 13% on a core basis from the prior-year quarter. This was due to macroeconomic uncertainties, and sluggish capital equipment spending by customers. The reported figure missed the Zacks Consensus Estimate of $849 million.
Nevertheless, the company witnessed growth in pre-owned instruments and consumables.
ACG: Revenues from the segment were $402 million, accounting for 25% of the total revenues. The figure surpassed the consensus mark of $385 million. The top line improved 4% from the prior-year quarter on a reported basis and rose 5% on a core basis. Growing lab demand, along with solid momentum in the CrossLab team, contributed well. Strong growth in contract revenues was a positive.
DGG: Revenues decreased 9% year over year on a reported and 8% on a core basis to $417 million, accounting for the remaining 27% of the total revenues. The figure beat the consensus mark of $332 million. Sluggishness in NGS Chemistries, cell analysis and NASD was concerning.
Nevertheless, strength in the pathology business, owing to solid clinical demand for Agilent’s Cancer Dx platform, was a positive.
Agilent Technologies, Inc. Price, Consensus and EPS Surprise
For the fiscal second quarter, the gross margin in the LSAG segment contracted by 40 basis points (bps) to 59.4% from the prior-year quarter. ACG’s gross margin expanded by 320 bps to 50.2%. DGG’s gross margin was flat year over year at 53.7%.
Research and development (“R&D”) costs were $113 million, down 10.3% from the prior-year quarter. Selling, general and administrative (“SG&A”) expenses were $380 million, down 8.4% from the year-earlier quarter. As a percentage of revenues, R&D expenses contracted by 10 bps year over year to 7.2%, while SG&A expenses were flat year over year at 24.2%.
The operating margin for the fiscal second quarter was 23.1%, which expanded 80 bps from the year-earlier quarter.
Segment-wise, the operating margin in the LSAG segment contracted by 320 bps to 24.7% from the prior-year quarter. ACG’s operating margin expanded by 390 bps to 30.5%. DGG’s operating margin remained flat year over year at 20.5%.
Balance Sheet
As of Apr 30, 2024, Agilent’s cash and cash equivalents were $1.67 billion, down from $1.75 billion as of Jan 31, 2024.
Accounts receivables were $1.249 billion at the end of second-quarter fiscal 2024 compared with $1.295 billion at the end of first-quarter fiscal 2024.
The long-term debt was $2.14 billion for the reported quarter, down from $2.56 billion in the prior quarter.
Guidance
For the third quarter of fiscal 2024, management expects revenues of $1.535-$1.575 billion, suggesting a decline of 8.2-5.8% on a reported basis and 6.9-4.5% on a core basis from the year-ago quarter. The Zacks Consensus Estimate for the same is pegged at $1.72 billion.
Non-GAAP earnings per share are expected to be $1.25-$1.28. The consensus mark for fiscal third-quarter earnings is pinned at $1.45 per share.
For fiscal 2024, management revised revenue guidance downward from $6.71-$6.81 billion to $6.42-$6.50 billion, implying a fall of 6-4.9% on a reported basis and 5.4-4.3% on a core basis from the fiscal 2023 reported figure. The Zacks Consensus Estimate for the same is pegged at $6.77 billion.
The company also revised fiscal 2024 non-GAAP earnings per share guidance downward from $5.44-$5.55 to $5.15-$5.25. The consensus mark for fiscal 2024 earnings is pinned at $5.50 per share.
Zacks Rank & Stocks to Consider
Currently, Agilent carries a Zacks Rank #3 (Hold).
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Agilent (A) Q2 Earnings Beat Estimates, Revenues Fall Y/Y
Agilent Technologies (A - Free Report) delivered second-quarter fiscal 2024 earnings of $1.22 per share, which beat the Zacks Consensus Estimate by 2.5%. However, the bottom line decreased 4% from the year-ago quarter.
Revenues of $1.57 billion lagged the Zacks Consensus Estimate by 0.5%. The top line declined 8.4% on a reported basis and 7.4% on a core basis from the year-ago quarter.
The decline was attributed to broad-based weakness across all end markets, especially in the Pharma, Food, and Academic and Government markets.
Weak momentum in China was another concern.
Segmental Top-Line Details
Agilent has three reporting segments — Life Sciences & Applied Markets Group (“LSAG”), Agilent Cross Lab Group (“ACG”), and Diagnostics and Genomics Group (“DGG”).
LSAG: The segment accounted for $754 million or 48% of the company’s total revenues, down 14% on a reported basis and 13% on a core basis from the prior-year quarter. This was due to macroeconomic uncertainties, and sluggish capital equipment spending by customers. The reported figure missed the Zacks Consensus Estimate of $849 million.
Nevertheless, the company witnessed growth in pre-owned instruments and consumables.
ACG: Revenues from the segment were $402 million, accounting for 25% of the total revenues. The figure surpassed the consensus mark of $385 million. The top line improved 4% from the prior-year quarter on a reported basis and rose 5% on a core basis. Growing lab demand, along with solid momentum in the CrossLab team, contributed well. Strong growth in contract revenues was a positive.
DGG: Revenues decreased 9% year over year on a reported and 8% on a core basis to $417 million, accounting for the remaining 27% of the total revenues. The figure beat the consensus mark of $332 million. Sluggishness in NGS Chemistries, cell analysis and NASD was concerning.
Nevertheless, strength in the pathology business, owing to solid clinical demand for Agilent’s Cancer Dx platform, was a positive.
Agilent Technologies, Inc. Price, Consensus and EPS Surprise
Agilent Technologies, Inc. price-consensus-eps-surprise-chart | Agilent Technologies, Inc. Quote
Operating Results
For the fiscal second quarter, the gross margin in the LSAG segment contracted by 40 basis points (bps) to 59.4% from the prior-year quarter. ACG’s gross margin expanded by 320 bps to 50.2%. DGG’s gross margin was flat year over year at 53.7%.
Research and development (“R&D”) costs were $113 million, down 10.3% from the prior-year quarter. Selling, general and administrative (“SG&A”) expenses were $380 million, down 8.4% from the year-earlier quarter. As a percentage of revenues, R&D expenses contracted by 10 bps year over year to 7.2%, while SG&A expenses were flat year over year at 24.2%.
The operating margin for the fiscal second quarter was 23.1%, which expanded 80 bps from the year-earlier quarter.
Segment-wise, the operating margin in the LSAG segment contracted by 320 bps to 24.7% from the prior-year quarter. ACG’s operating margin expanded by 390 bps to 30.5%. DGG’s operating margin remained flat year over year at 20.5%.
Balance Sheet
As of Apr 30, 2024, Agilent’s cash and cash equivalents were $1.67 billion, down from $1.75 billion as of Jan 31, 2024.
Accounts receivables were $1.249 billion at the end of second-quarter fiscal 2024 compared with $1.295 billion at the end of first-quarter fiscal 2024.
The long-term debt was $2.14 billion for the reported quarter, down from $2.56 billion in the prior quarter.
Guidance
For the third quarter of fiscal 2024, management expects revenues of $1.535-$1.575 billion, suggesting a decline of 8.2-5.8% on a reported basis and 6.9-4.5% on a core basis from the year-ago quarter. The Zacks Consensus Estimate for the same is pegged at $1.72 billion.
Non-GAAP earnings per share are expected to be $1.25-$1.28. The consensus mark for fiscal third-quarter earnings is pinned at $1.45 per share.
For fiscal 2024, management revised revenue guidance downward from $6.71-$6.81 billion to $6.42-$6.50 billion, implying a fall of 6-4.9% on a reported basis and 5.4-4.3% on a core basis from the fiscal 2023 reported figure. The Zacks Consensus Estimate for the same is pegged at $6.77 billion.
The company also revised fiscal 2024 non-GAAP earnings per share guidance downward from $5.44-$5.55 to $5.15-$5.25. The consensus mark for fiscal 2024 earnings is pinned at $5.50 per share.
Zacks Rank & Stocks to Consider
Currently, Agilent carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Arista Networks (ANET - Free Report) , Badger Meter (BMI - Free Report) and Dropbox (DBX - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks’ shares have gained 30.6% in the year-to-date period. The long-term earnings growth rate for ANET is expected to be 15.68%.
Badger Meter’s shares have gained 27% in the year-to-date period. The long-term earnings growth rate for BMI is projected at 15.57%.
Shares of Dropbox have declined 22.6% in the year-to-date period. The long-term earnings growth rate for DBX is anticipated to be 11.44%