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Agilent tops estimates
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November 20, 2000: 5:56 p.m. ET
Test and measurement gear maker's 4Q handily beat estimates
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NEW YORK (CNNfn) - Agilent Technologies on Monday turned in a fiscal fourth-quarter profit that substantially beat Wall Street's expectations on sales that rose 36 percent from the same period a year earlier.
And executives at the Palo Alto, Calif.-based company said the company remains on track to post 20 percent revenue growth in the coming fiscal year.
During the three-month period ended Oct. 31, Agilent said it earned $305 million, or 66 cents per share. That's up from $146 million, or 39 cents per share, during the same period last year and is well above the 53 cents per share analysts surveyed by earnings tracker First Call had expected the company to report.
Agilent (A: Research, Estimates), which makes test and measurement equipment, logged total revenue of $3.4 billion, which is up from $2.5 billion during last year's fiscal fourth quarter and is slightly ahead of the $3.1 billion analysts had expected, according to a First Call survey.
The company's latest results include a one-time benefit of 17 cents per share from the sale of a portfolio of leased assets to The CIT Group and a one-time charge of 3 cents per share related to the restructuring of the company's healthcare solutions group announced last August.
For the full fiscal year, Agilent reported net earnings of $757 million, or $1.66 per share, up from $512 million, or $1.35 per share in fiscal 1999. Fiscal 2000 revenue totaled $10.7 million compared with $8.3 million last year.
Shares of Agilent, a spin-off of Hewlett-Packard, fell $3, or 6.3 percent, to $44.38 in New York Stock Exchange trade ahead of the earnings news, which was released after the markets closed. They rose to $46 in after-hours trade.
 "Our fourth quarter was a very strong finish to a great first year for Agilent," Ned Barnholt, Agilent's president and chief executive, said in a teleconference with analysts Monday evening. "Our revenue and profitability for the year were well ahead of our original plan and midyear guidance."
However, when the company reported its third-quarter results in August, Agilent executives admitted that their internal reporting mechanisms remained "unwieldy" after the split from HP, which they blamed in part for a wide disparity between the results they reported for that quarter and what they had told the Street to expect.
They told analysts at that time that they were streamlining the number of software systems running the various divisions of the company and said in Monday's call that they are "encouraged" by the results they have seen so far.
More capacity, components help in 4Q
During the most recent quarter, Agilent executives attributed the upside largely to increased manufacturing capacity and better availability of components. They also said the company remains on track to meet its previously stated financial objectives for fiscal 2001.
"We're still comfortable with our current guidance of at least 20 percent revenue growth and a net margin of around 8 percent," Barnholt said.
For the fiscal first quarter, the current consensus earnings estimate of 45 cents per share is "realistic," said Robert Walker, Agilent's chief financial officer.
In the fourth quarter, Agilent said orders from its communications and electronics businesses, which comprise about 80 percent of the company's revenue, rose 32 percent. Net revenue for these businesses rose 59 percent from the same period a year ago, Agilent said.
 The company said its healthcare solutions business, which it agreed last week to sell to Royal Philips Electronics for $1.7 billion, achieved "record order performance" during the quarter. However, at $395 million, revenue from unit was up a modest 1 percent from the same period a year earlier.
Agilent's chemical analysis division posted a slight decline in revenue, which, at $283 million, was down 1 percent from last year's fourth quarter. The company is shifting that unit's focus to the higher-growth bioscience and pharmaceutical markets.
Moving ahead, Agilent plans to continue to sharpen its focus on growth areas while limiting its exposure to areas where there is less potential for growth, Barnholt said.
"We're now more focused on achieving strong, profitable growth in communications and life sciences," he said. "We've added manufacturing capacity in both areas to address the extremely strong demand for our products. We'll continue to emphasize product innovation to stay in leadership positions in our businesses." 
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