Agilent Technologies Reports Fourth Quarter 2006 Results.SANTA CLARA Santa Clara, city, Cuba Santa Clara (sän`tä klä`rä), city (1994 est. pop. 217,000), capital of Villa Clara prov., central Cuba. , Calif. -- 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 from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $1.40 billion for the fourth fiscal quarter ended Oct. 31, 2006, 7 percent above one year ago. Revenues during the quarter were $1.33 billion, 6 percent above last year. Fourth quarter GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). income from continuing operations was $132 million, or $0.32 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with a loss of $22 million, or $0.04 per share, in last year's fourth quarter. Included in GAAP income from continuing operations are $47 million of charges related principally to the spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of Verigy and the reduction of Agilent's infrastructure costs, and $21 million of non-cash compensation charges. Excluding these items and $9 million of tax and other net gains, Agilent reported fourth quarter adjusted net income from continuing operations of $191 million, or $0.46 per share. On a comparable basis, the company earned $147 million, or $0.29 per share, one year ago. Including the results of Verigy, Agilent's fourth quarter adjusted net income was $0.52 per share.(1) "The distribution of Verigy shares to our owners completes a transformative year for Agilent," said Bill Sullivan, Agilent president and chief executive officer. "As a pure-play measurement company, we finished fiscal 2006 with strong operating results and good momentum." In Q4, orders were up 7 percent from one year ago, revenues were up 6 percent, and adjusted net income per share from continuing operations, at $0.46 per share, was 59 percent above last year's results. Sullivan noted that the company's fourth quarter Return On Invested Capital(2), at 29 percent, reached a new high. Adjusted operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were strong, inventories were below 100 Days-on-Hand during the quarter, and total cash generated from continuing operating activities reached $300 million. After distribution of Verigy shares, the company ended the year with net cash of $2.3 billion. During the quarter, the company announced a repurchase program of up to $2 billion of its common stock over the next two years. Sullivan added, "While being mindful mind·ful adj. Attentive; heedful: always mindful of family responsibilities. See Synonyms at careful. mind of economic uncertainties in the year ahead, Agilent's focus is to leverage, through higher sustainable growth, the robust operating model Operating Model is a term that is used in many contexts. In essence an operating model describes how an organization operates across both business and technology domains. The Operating Model describes what is important for the organization. we've built. We have the strongest backlog in a half-decade, and look forward to 2007." In the fiscal first quarter of 2007, Agilent expects revenues of $1.25 billion to $1.29 billion, up 7 percent to 10 percent from last year. Adjusted net income is expected to be in the range of $0.36 to $0.40 per share(3), 24 percent to 38 percent above last year's comparable earnings. Segment Results [TABLE OMITTED] Bio-Analytical Measurement recorded double-digit orders growth again in the fourth quarter, with a 15 percent year-to-year increase following the third quarter's 11 percent rise. Record revenues of $418 million were up 9 percent from last year, and the segment's book-to-bill ratio Book-to-Bill Ratio The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled. Notes: This ratio tells whether the company has more orders than it can deliver (if greater than 1), has the same amount of orders that it can reached 1.11 during the quarter. Life Sciences revenues of $182 million were up 12 percent, with particular strength in China and India, broad acceptance of the company's 1200 Series Liquid Chromatographs, and some signs of a rebound in large pharmaceutical spending. Chemical Analysis revenues of $236 million were up 8 percent from last year, with sustained momentum in Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. and Asia in the categories of food safety and the environment. Segment income from operations of $83 million was $18 million above last year on a $36 million increase in revenues. Gross margins improved by 3 points, while operating margins also increased 3 points to a record 20 percent. Segment Return On Invested Capital(2), at 35 percent, was about unchanged from last year due to the impact of acquisitions. [TABLE OMITTED] Fourth quarter Electronic Measurement orders of $935 million were up 4 percent from last year, with solid demand in the Americas and Asia, while Europe was about flat with last year. Revenues of $909 million were up 5 percent, with strength in General Purpose Test, particularly for oscilloscopes and component test products, while aerospace & defense was relatively flat compared to last year. Communications test was also relatively flat, with strength in wireless R&D test offset by continued weakness in wireline test markets. Fourth quarter income from operations of $143 million was up $12 million from last year's very strong results on a $43 million increase in revenues. Gross margins improved 2 points while segment operating margins rose 1 point, to 16 percent. Segment ROIC ROIC Return On Invested Capital ROIC Return On Investment Capital ROIC Readout Integrated Circuit ROIC Resident Officer In Charge ROIC Regional Office Implementation Committee (2) of 28 percent was 2 points better than last year based on sustained improvements in both margins and working capital management. About Agilent Technologies Agilent Technologies Inc. (NYSE:A) is the world's premier measurement company and a technology leader in communications, electronics, life sciences and chemical analysis. The company's 19,000 employees serve customers in more than 110 countries. Agilent had net revenue of $5.0 billion in fiscal 2006. Information about Agilent is available on the Web at www.agilent.com. Agilent's management will present more details on its fourth quarter FY2006 financial results on a conference call with investors beginning at 5 a.m. (Pacific). This event will be webcast live in listen-only mode. Listeners may log on at www.investor.agilent.com and select "Q4 2006 Agilent Technologies Inc. Earnings Conference Call" in the "News & Events -- Calendar of Events" section. The webcast will remain available on the company's Web site for 90 days. A telephone replay of the conference call will be available from 10 a.m. (Pacific) today through Nov. 21, 2006. The replay number is +1 888 286 8010, or international callers may dial +1 617 801 6888; enter pass code 60693962. 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. This news release contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. created therein. The forward-looking statements contained herein include, but are not limited to, information regarding Agilent's future revenues, earnings and profitability; the pace of new product introductions and future demand for the Company's products and services; and guidance for the first quarter of fiscal year 2007. These forward-looking statements involve risks and uncertainties that could cause Agilent's results to differ materially from management's current expectations. Such risks and uncertainties include, but are not limited to, unforeseen changes in the strength of our customers' businesses, and unforeseen changes in the demand for current and new products and technologies. In addition, other risks that Agilent faces in running its operations include the ability to execute successfully through business cycles while it continues to implement cost reductions; the ability to meet and achieve the benefits of its cost-reduction goals and otherwise successfully adapt its cost structures to continuing changes in business conditions; ongoing competitive, pricing and gross margin pressures; the risk that our cost-cutting initiatives will impair im·pair tr.v. im·paired, im·pair·ing, im·pairs To cause to diminish, as in strength, value, or quality: an injury that impaired my hearing; a severe storm impairing communications. our ability to develop products and remain competitive and to operate effectively; the impact of geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. uncertainties on our operations, our markets and our ability to conduct business, the ability to improve asset performance to adapt to changes in demand; the ability to successfully introduce new products at the right time, price and mix, and other risks detailed in Agilent's filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarterly period ended July 31, 2006. Forward-looking statements are based on the beliefs and assumptions of Agilent's management and on currently available information. Agilent undertakes no responsibility to publicly update or revise any forward-looking statement. (1) Adjusted net income from continuing operations, adjusted net income from continuing operations per share, and adjusted net income are non-GAAP measures. Each of these measures is defined to exclude primarily the impacts of restructuring and asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges, business separation costs, non-cash stock-based compensation, intangible amortization as well as gains and losses from the sale of investments and disposals of businesses net of their tax effects. Adjusted net income from continuing operations excludes the impact of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , including Verigy, and adjusted net income includes the impact of Verigy. A reconciliation between adjusted net income from continuing operations, adjusted net income, and GAAP net income from continuing operations is set forth on page 5 of the attached tables along with additional information regarding the use of this non-GAAP measure. (2)Return On Invested Capital is a non-GAAP measure and is defined as income (loss) from operations less other (income) expense and taxes, annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. , divided by the average of the two most recent quarter-end balances of assets less net current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. . The reconciliation of ROIC can be found on page 6 of the attached tables, along with additional information regarding the use of this non-GAAP measure. (3)Adjusted net income per share as projected for Q107 is a non-GAAP measure which excludes primarily the impacts of future restructuring and asset impairment charges, non-cash stock-based compensation, and intangibles amortization. Most of these excluded amounts pertain to pertain to verb relate to, concern, refer to, regard, be part of, belong to, apply to, bear on, befit, be relevant to, be appropriate to, appertain to events that have not yet occurred and are not currently possible to estimate with a reasonable degree of accuracy. Therefore, no reconciliation to GAAP amounts has been provided. Future amortization of intangibles is expected to be approximately $10 million per quarter. (4) Historical segment data have been restated to correspond to current presentation. NOTE TO EDITORS: Further technology, corporate citizenship Corporate Citizenship The extent to which businesses are socially responsible in meeting legal, ethical and economic responsibilities placed on them by shareholders. The aim it to create higher standards of living and quality of life in the community in which it operates, while and executive news is available on the Agilent news site at www.agilent.com/go/news. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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