Agilent reports Q2 results

Orders, revenues at highest levels in three years

Agilent Technologies Inc. (NYSE:A) reported orders of $1.89 billion for the second fiscal quarter ended April 30, 2004, 24 percent above one year ago. Revenues during the quarter were $1.83 billion, 25 percent ahead of last year. Second quarter GAAP net earnings were $104 million, or $0.21 per diluted share, compared to a loss of $146 million, or $0.31 per share, in last year's second quarter.

Excluding $15 million of net restructuring and amortization charges, Agilent reported second quarter operating net income of $119 million, or $0.24 per share, versus a loss on a comparable basis of $72 million, or $0.15 per share, one year ago.

"Agilent's businesses are clearly picking up, with virtually all of our major markets and all geographies gaining momentum," said Ned Barnholt, Agilent chairman, president and chief executive officer. "Orders and revenue were at their highest levels since early 2001. Operating earnings per share(1) of 24 cents were near the top end of our guidance range -- three cents better than the first quarter and 39 cents above last year."

For the third consecutive quarter, Agilent generated positive free cash flow from operations(2). The company ended the quarter with $1.84 billion of cash and equivalents, up $164 million from the prior quarter. Inventory days-on-hand improved by 21 from one year ago to 94. Receivables days sales outstanding improved by 3 from one year ago to 54. Capital spending of $35 million was $32 million below the level of depreciation.

"Given our strong orders and revenues, our performance on the bottom line could have been even better," said Barnholt. "With our markets clearly on the upswing, our market shares stable or rising, and our fundamental cost structure firmly in place, Agilent's remaining challenge is to demonstrate superior performance on the bottom line. We intend to make significant progress against that commitment during the second half of this year."

For the seasonally soft third quarter, Agilent expects revenues of $1.80 billion to $1.90 billion, roughly in line with second quarter results. Operating earnings should be in the range of $0.25 to $0.30 per share(3) compared to the second quarter's $0.24. During the fourth quarter, the company currently anticipates revenues to be roughly $50 million above the third quarter and operating earnings per share to be up an additional $0.05.