Agilent Technologies Reports Better-Than-Expected First Quarter Results; Restructuring Plan on Track.Business Editors/High-Tech Writers PALO ALTO Palo Alto, city, California Palo Alto (păl`ō ăl`tō), city (1990 pop. 55,900), Santa Clara co., W Calif.; inc. 1894. Although primarily residential, Palo Alto has aerospace, electronics, and advanced research industries. , Calif.--(BUSINESS WIRE)--Feb. 19, 2002 Agilent Technologies This article needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. Inc. (NYSE NYSE See: New York Stock Exchange : A) today reported orders of $1.47 billion and revenue of $1.43 billion for the first quarter of the fiscal year 2002 ended Jan. 31. On an operating earnings-before-goodwill (EBG EBG Electromagnetic Band Gap EBG Ernst-Barlach-Gymnasium (German high school name; several cities) EBG European Board of Gastroenterology EBG EuroBonus Gold EBG Electron Beam Gun EBG Electronic Book G EBG Extended Boolean Graphs ) basis, the company lost $134 million, or $0.29 per share, better than company expectations of a loss of $0.40 to $0.60 per share. After $96 million of non-cash goodwill and amortization charges and $105 million of restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). expenses, the net first quarter loss was $315 million, or $0.68 per share. "While business conditions remain extremely difficult, we are seeing the first signs of a modest upturn," said Agilent (Agilent Technologies, Santa Clara, CA, www.agilent.com) The test and measurement subsidiary of HP. In 1999, HP split off the division that started the company into an independent subsidiary named Agilent Technologies. At the time, the $2. President and Chief Executive Officer Ned Barnholt. "Compared to last year, orders and revenues are down 41 and 44 percent, respectively. But, after five consecutive quarters of steep declines, first quarter net orders were up 20 percent over the fourth quarter of last year. With order cancellations of $80 million down sharply compared to last quarter's $250 million, we have some confidence that market conditions in our businesses are stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. ." "The impact of our tough actions to restore Agilent to financial health are beginning to be reflected in our operating results," said Barnholt. "We are reducing structure and complexity, and continue to anticipate that Agilent's workforce will be down by about 18 percent by mid 2002. We are on track to achieve a return to profitability sometime during our fiscal third quarter." Barnholt also pointed out that the quality of operating performance had improved. Agilent had no material write-offs of excess inventories this period, compared to a $187 million charge in last year's fourth quarter. The company reduced inventories by $91 million and receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed by $162 million during the quarter. At $69 million, first quarter capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. was down almost $100 million from one year ago. "At the same time, we are sustaining Agilent's enterprise-scale commitment to accelerated new product development," said Barnholt. "Last year, we had a record number of new products, and the pace of introductions continues unabated un·a·bat·ed adj. Sustaining an original intensity or maintaining full force with no decrease: an unabated windstorm; a battle fought with unabated violence. . We are convinced con·vince tr.v. con·vinced, con·vinc·ing, con·vinc·es 1. To bring by the use of argument or evidence to firm belief or a course of action. See Synonyms at persuade. 2. that these new products are producing market share gains today and will enable Agilent to materially outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, our markets when economic conditions improve." Business Outlook On second quarter and full year 2002 guidance, Barnholt said, "We are encouraged by early signs that the U.S. economy is reaching the bottom, and we anticipate that a modest recovery in the overall economy will begin this spring. Semiconductor products and semiconductor test equipment, Agilent's traditional early-cycle businesses, have begun to see some recovery in the current period. In our communications markets, we anticipate the wireless and metro markets will begin to turn in our second half, but we expect no meaningful recovery of our optical and long-haul long haul n. 1. A long distance: It is a long haul from New York to Los Angeles. 2. A long period of time: Over the long haul the candidates performed well. markets before our fiscal year end. "Given Agilent's business diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. , we expect a modest increase in second quarter revenues to about $1.45 billion to $1.55 billion, and an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. before goodwill of $0.20 to $0.30 per share. While visibility beyond three months remains very poor, we are comfortable with the current range of analysts' expectations for the second half of our fiscal year."
Segment Results
Test and Measurement
Q1:F02 Q4:F01 Q1:F01
------ ------ ------
Orders 832 676 1,620
Revenues 822 936 1,705
Operating Profit(1) (229) (355) 266
Test and measurement orders were off 49 percent from one year ago but were 23 percent above fourth quarter levels, with particular strength in semiconductor test equipment orders for System on a Chip (SOC (System On a Chip) The electronics for a complete, working product contained on a single chip. While a microcontroller includes all the hardware components required to process instructions, an SoC includes the computer and all required ancillary electronics. ) device testers and for Agilent's new flash memory tester. In other T&M markets, orders were about 10 percent above depressed Depressed A description of a market, security, or product that is experiencing weak demand and lowering prices. Notes: A depressed market, security, or product implies that prices and volume are low. There are many reasons for a depressed market, security, or product. fourth quarter levels. Operating losses were reduced by $126 million compared to the fourth quarter of last year, principally because of a $129 million reduction in inventory write-offs. Excluding that impact, operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. were down only $3 million despite $114 million lower revenues due to tight expense controls and the initial benefits of the restructuring program.
Semiconductor Products
Q1:F02 Q4:F01 Q1:F01
------ ------ ------
Orders 346 260 553
Revenues 327 383 592
Operating Profit(1) (50) (115) 62
Orders for semiconductor products were down 37 percent from last year but were up 33 percent sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen , with personal systems orders up 51 percent from the fourth quarter and networking orders up a more modest 8 percent. Operating losses were reduced by $65 million from the fourth quarter despite a 15 percent drop in revenues because of a $43 million reduction in inventory write-offs and restructuring benefits.
Life Sciences and Chemical Analysis
Q1:F02 Q4:F01 Q1:F01
------ ------ ------
Orders 287 285 299
Revenues 277 287 268
Operating Profit(1) 38 38 7
Orders in life sciences and chemical analysis were down about 4 percent from one year ago. Excluding a change in the seasonal ordering pattern of one major customer, orders were up about 2 percent. Sequentially, orders were about flat, with strength in life sciences essentially offset by weaker chemical analysis equipment orders. Profits were flat sequentially, despite $10 million lower revenues, and were $31 million above one year ago on $9 million higher revenues due to better gross margins and lower operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Concluding, Barnholt said, "I am extraordinarily proud of all of our employees for their remarkable efforts to help restore Agilent to financial health. I remain confident that we will emerge from these challenging times stronger than ever, as a true global leader." About Agilent Technologies Agilent Technologies Inc. (NYSE: A) is a global technology leader in communications, electronics and life sciences. The company's 39,000 employees serve customers in more than 120 countries. Agilent had net revenue of $8.4 billion in fiscal year 2001. Information about Agilent is available on the Web at www.agilent.com. More financial information about this quarter's earnings is available at www.investor.agilent.com. Agilent management will host a live webcast of its quarterly conference call with the investment community in listen-only mode today at 2 p.m. (PT). Listeners may log on at www.investor.agilent.com and select "conference calls." The webcast will remain on the company site for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 30 days. A telephone replay of the conference call will be available starting at 6 p.m. (PT) on Feb. 19 until March 21 by dialing +1 719 457 0820 and entering pass code 706169. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. (including, without limitation, information regarding projected revenue, earnings, workforce reductions, overall financial results, expected market share gains, general outlook for the company, and the general economic outlook) that involve risks and uncertainties that could cause results of Agilent Technologies to differ materially from management's current expectations. In addition, other risks that Agilent faces in running its operations include: the ability to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution successfully through the current economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. and an upturn, competitive and pricing pressures, the timely ability to adapt manufacturing capacity to changes in demand, the ability to meet our cost reduction goals, the ability to manage inventory levels to adapt to the current economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. and other changes in demand, the successful redesign re·de·sign tr.v. re·de·signed, re·de·sign·ing, re·de·signs To make a revision in the appearance or function of. re and implementation of the company's business processes and systems, the ability to successfully introduce new products, and other risks detailed in the company's filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended Oct. 31, 2001. The company assumes no obligation to update the information in this press release. (1) Before restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. in all periods.
AGILENT TECHNOLOGIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
Excluding Amortization of Goodwill and Other Intangibles,
Acquisition and Divestiture Related Items and
Other One-Time and Non-Operational Items
(Unaudited)
(In millions, except per share amounts)
Three Months Ended
January 31,
-------------------- Percent
2002 2001 Inc/(Dec)
------- ------- --------
Orders $ 1,465 $ 2,472 (41%)
Net revenue $ 1,426 $ 2,565 (44%)
Costs and expenses:
Cost of products and services 820 1,220 (33%)
Research and development 286 322 (11%)
Selling, general and administrative 561 688 (18%)
------- -------
Total costs & expenses 1,667 2,230 (25%)
------- -------
(Loss) earnings from operations (241) 335 (172%)
Other income (expense), net 14 11 27%
------- -------
(Loss) earnings before taxes (227) 346 (166%)
(Benefit) provision for taxes (93) 114 (181%)
------- -------
Pro forma net (loss) earnings $ (134) $ 232 (158%)
======= =======
Pro forma net (loss) earnings
per share - Basic $ (0.29) $ 0.51
======= =======
Pro forma net (loss) earnings
per share - Diluted $ (0.29) $ 0.50
======= =======
Average shares used in
computing pro forma net (loss)
earnings per share:
Basic 463 455
Diluted 463 466
The above pro forma condensed consolidated statement of earnings has
been adjusted to exclude the following one-time and non-operational
items and reconcile to GAAP net (loss) earnings:
Net (loss) earnings per GAAP $ (315) $ 100
Pro forma adjustments:
Goodwill 83 41
Other intangibles 13 -
Restructuring 105 -
Gain on sale of equity investment (5) -
SFAS No. 133 Adoption - 41
SAB 101 adoption - 74
Loss relating to securities - (5)
Discontinued operations - 3
Gain from sale of
discontinued operations (3) -
Adjustment for income taxes (12) (22)
------- -------
Pro forma net (loss) earnings
from continuing operations $ (134) $ 232
======= =======
We provide pro forma financial information to help the reader better
understand our operating results. This information is not in
accordance with, or an alternative for, generally accepted accounting
principles and may be different from the pro forma information
provided by other companies.
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited)
(In millions, except per share amounts)
Three Months Ended
January 31,
-------------------- Percent
2002 2001 Inc/(Dec)
------- ------- --------
Orders $ 1,465 $ 2,472 (41%)
Net revenue $ 1,426 $ 2,565 (44%)
Costs and expenses:
Cost of products and services 878 1,222 (28%)
Research and development 298 322 (7%)
Selling, general and administrative 692 727 (5%)
------- -------
Total costs & expenses 1,868 2,271 (18%)
------- -------
(Loss) earnings from
continuing operations (442) 294 (250%)
Other income (expense), net 19 17 12%
------- -------
(Loss) earnings from continuing
operations before taxes (423) 311 (236%)
(Benefit) provision for taxes (106) 137 (177%)
------- -------
Net (loss) earnings from
continuing operations (317) 174 (282%)
Loss from discontinued operations,
net of taxes - (2) N/M
Gain from sale of discontinued
operations, net of taxes 2 - N/M
Cumulative effect of adopting SFAS
No. 133, net of taxes - (25) N/M
Cumulative effect of adopting SAB 101,
net of taxes - (47) N/M
------- -------
Net (loss) earnings $ (315) $ 100 (415%)
======= =======
Net earnings per share - Basic:
Net (loss) earnings from
continuing operations $ (0.68) $ 0.38
Loss from discontinued operations $ - $ -
Gain from the sale of
discontinued operations $ - $ -
Cumulative effect of
adopting FAS 133 $ - $ (0.06)
Cumulative effect of
adopting SAB 101 $ - $ (0.10)
------- -------
$ (0.68) $ 0.22
======= =======
Net earnings per share - Diluted:
Net (loss) earnings from
continuing operations $ (0.68) $ 0.37
Loss from discontinued operations $ - $ -
Gain from the sale of
discontinued operations $ - $ -
Cumulative effect of
adopting FAS 133 $ - $ (0.06)
Cumulative effect of
adopting SAB 101 $ - $ (0.10)
------- -------
$ (0.68) $ 0.21
======= =======
Average shares used in computing net (loss) earnings per share:
Basic 463 455
Diluted 463 466
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(In millions, except par value and share amounts)
January 31, October 31,
---------------------
2002 2001
------- -------
ASSETS
Current assets:
Cash and cash equivalents $ 2,188 $ 1,170
Accounts receivable, net 817 977
Inventory 1,382 1,491
Net investment in lease receivable 247 237
Other current assets 833 924
------- -------
Total current assets 5,467 4,799
Property, plant and equipment, net 1,787 1,848
Goodwill and other intangible assets, net 952 1,070
Other assets 352 269
------- -------
Total assets $ 8,558 $ 7,986
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 321 $ 386
Notes payable and short-term borrowings 9 6
Employee compensation and benefits 534 576
Deferred revenue 269 279
Accrued taxes and other
accrued liabilities 527 755
------- -------
Total current liabilities 1,660 2,002
------- -------
Senior convertible debentures 1,150 -
Other liabilities 353 325
Commitments and contingencies
Stockholders' equity:
Preferred stock; $0.01 par value;
125 million shares authorized; none
issued and outstanding
Common stock; $0.01 par value; 2 billion
shares authorized; 464 million shares
at January 31, 2002 5 5
and 461 million shares at October 31,
2001 issued and outstanding
Additional paid-in capital 4,779 4,723
Retained earnings 616 931
Accumulated comprehensive income (loss) (5) -
------- -------
Total stockholders' equity 5,395 5,659
------- -------
Total liabilities and
stockholders' equity $ 8,558 $ 7,986
======= =======
AGILENT TECHNOLOGIES, INC.
PRO FORMA EARNINGS (LOSS) FROM CONTINUING OPERATIONS
BY BUSINESS SEGMENT
(Unaudited)
(In millions, except percent changes)
For the three months Yr vs.Yr Sequential
ended January 31 2002 2001 %change %change
---------------------------------------
PRO FORMA EARNINGS (LOSS) FROM CONTINUING OPERATIONS
Test and measurement $ (229) $ 266 (186%) 35%
Semiconductor products (50) 62 (181%) 57%
Life sciences and
chemical analysis 38 7 443% -
------ ------ ------ ------
Total $ (241) $ 335 (172%) 44%
====== ====== ====== ======
We provide pro forma financial information to help the reader better
understand our operating results. This information is not in
accordance with, or an alternative for, generally accepted accounting
principles and may be different from the pro forma information
provided by other companies.
Historical amounts were reclassified to conform with current period
presentation.
AGILENT TECHNOLOGIES, INC.
ORDERS AND NET REVENUE FROM CONTINUING OPERATIONS
BY BUSINESS SEGMENT
(Unaudited)
(In millions, except percent changes)
For the three months
ended January 31 Yr vs.Yr Sequential
2002 2001 %change %change
------ ------ ------ ------
ORDERS
Test and measurement $ 832 $1,620 (49%) 23%
Semiconductor products 346 553 (37%) 33%
Life sciences and
chemical analysis 287 299 (4%) 1%
------ ------ ------ ------
Total $1,465 $2,472 (41%) 20%
====== ====== ====== ======
NET REVENUE
Test and measurement $ 822 $1,705 (52%) (12%)
Semiconductor products 327 592 (45%) (15%)
Life sciences and
chemical analysis 277 268 3% (3%)
------ ------ ------ ------
Total $1,426 $2,565 (44%) (11%)
====== ====== ====== ======
In general, recorded orders represent firm purchase commitments from
our customers with established terms and conditions for products and
services that will be delivered within six months.
AGILENT TECHNOLOGIES, INC.
PERCENT CHANGE IN Q1 ORDERS AND NET REVENUE BY MARKET SEGMENT
YEAR VERSUS YEAR COMPARISON
Q1 FY02 versus Q1 FY01
(Unaudited)
(In millions, except percent changes)
Orders
-----------------------------------
Q1 FY02 % Change % of
$ Amount Y/Y Segment
-----------------------------------
Test and Measurement
--------------------
Communications test $ 324 (63%) 39%
Semiconductor test 153 (9%) 18%
General purpose test 355 (38%) 43%
------- -------- -------
$ 832 (49%) 100%
======= ======== =======
Semiconductor Products
----------------------
Networking $ 118 (57%) 34%
Personal systems 228 (19%) 66%
------- -------- -------
$ 346 (37%) 100%
======= ======== =======
Net Revenue
-----------------------------------
Q1 FY02 % Change % of
$ Amount Y/Y Segment
-----------------------------------
Test and Measurement
--------------------
Communications test $ 360 (59%) 44%
Semiconductor test 108 (52%) 13%
General purpose test 354 (41%) 43%
------- -------- -------
$ 822 (52%) 100%
======= ======== =======
Semiconductor Products
----------------------
Networking $ 127 (51%) 39%
Personal systems 200 (40%) 61%
------- -------- -------
$ 327 (45%) 100%
======= ======== =======
Historical amounts were reclassified to conform with current period
presentation.
AGILENT TECHNOLOGIES, INC.
PERCENT CHANGE IN Q1 ORDERS AND NET REVENUE BY MARKET SEGMENT
SEQUENTIAL COMPARISON
Q1 FY02 versus Q4 FY01
(Unaudited)
(In millions, except percent changes)
Orders
--------------------------------
Q1 FY02 % of
$ Amount % Change Segment
--------------------------------
Test and Measurement
--------------------
Communications test $ 324 14% 39%
Semiconductor test 153 155% 18%
General purpose test 355 7% 43%
------- -------- ------
$ 832 23% 100%
======= ======== ======
Semiconductor Products
----------------------
Networking $ 118 8% 34%
Personal systems $ 228 51% 66%
------- -------- ------
$ 346 33% 100%
======= ======== ======
Net Revenue
--------------------------------
Q1 FY02 % of
$ Amount % Change Segment
--------------------------------
Test and Measurement
--------------------
Communications test $ 360 13% 44%
Semiconductor test 108 8% 13%
General purpose test 354 (32%) 43%
------- -------- ------
$ 822 (12%) 100%
======= ======== ======
Semiconductor Products
----------------------
Networking $ 127 (26%) 39%
Personal systems $ 200 (6%) 61%
------- -------- ------
$ 327 (15%) 100%
======= ======== ======
Historical amounts were reclassified to conform with current period
presentation.
AGILENT TECHNOLOGIES, INC.
ORDERS AND NET REVENUE BY MARKET SEGMENT RESTATED
FY01
(Unaudited)
(In millions)
Orders
-----------------------------------------------
Q1 FY01 Q2 FY01 Q3 FY01 Q4 FY01
$ Amount $ Amount $ Amount $ Amount
-----------------------------------------------
Test and Measurement
--------------------
Communications test $ 874 $ 457 $ 342 $ 284
Semiconductor test 169 28 81 60
General purpose test 577 447 370 332
--------------------------------------------
$1,620 $ 932 $ 793 $ 676
============================================
Semiconductor Products
----------------------
Networking $ 273 $ 20 $ 97 $ 109
Personal systems 280 180 180 151
--------------------------------------------
$ 553 $ 200 $ 277 $ 260
============================================
Net Revenue
--------------------------------------------
Q1 FY01 Q2 FY01 Q3 FY01 Q4 FY01
$ Amount $ Amount $ Amount $ Amount
--------------------------------------------
Test and Measurement
--------------------
Communications test $ 874 $ 684 $ 443 $ 318
Semiconductor test 226 189 108 100
General purpose test 605 788 579 518
--------------------------------------------
$1,705 $1,661 $1,130 $ 936
============================================
Semiconductor Products
----------------------
Networking $ 261 $ 214 $ 207 $ 171
Personal systems 331 241 213 212
--------------------------------------------
$ 592 $ 455 $ 420 $ 383
============================================
Amounts were reclassified to conform with current period presentation.
AGILENT TECHNOLOGIES, INC.
ORDERS AND NET REVENUE FROM CONTINUING OPERATIONS
BY GEOGRAPHY
For The Three Months Ended January 31
(Unaudited)
(Percent)
(In millions) -----------------------
------ ------ USD Local Currency
2002 2001 Growth Growth
------ ------ -----------------------
ORDERS
United States $ 578 $ 973 (41%) (41%)
Europe 298 525 (43%) (44%)
Asia Pacific 529 841 (37%) (34%)
Latin America 28 53 (47%) (47%)
Canada 32 80 (60%) (58%)
------ ------
Total $1,465 $2,472 (41%) (40%)
====== ======
NET REVENUE
United States $ 520 $1,151 (55%)
Europe 305 549 (44%)
Asia Pacific 525 705 (26%)
Latin America 41 72 (43%)
Canada 35 88 (60%)
------ ------
Total $1,426 $2,565 (44%)
====== ======
In general, recorded orders represent firm purchase commitments from
our customers with established terms and conditions for products and
services that will be delivered within six months.
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