Agilent Technologies Reports Strong First-Year Results; Revenue of $10.8 Billion Up 29 Percent; Net Earnings Up 48 Percent; Fourth-Quarter EPS 13 Cents Over Company Guidance
PALO ALTO, Calif.--(BUSINESS WIRE)--Nov. 20, 2000--Agilent Technologies Inc. (NYSE:A), a leading provider of innovative technologies for communications and life sciences, today reported record net revenue of $10.8 billion for fiscal 2000, an increase of 29 percent compared with fiscal 1999. Net earnings increased 48 percent for the year, and pro forma diluted net earnings per share were $1.63. Orders rose 35 percent for fiscal 2000, which ended Oct. 31.
"Our fourth quarter was a very strong finish to a great first year for Agilent," said Ned Barnholt, president and chief executive officer of Agilent. "Our revenue and profitability for the year were well ahead of our original plan and midyear guidance. We achieved these results because of the hard work and dedication of Agilent's people worldwide. Our products and services are helping our customers drive innovation in communications and life sciences.
"We achieved these results despite some real challenges," said Barnholt. "Our healthcare solutions business had a very tough year, and we experienced parts shortages because of industrywide capacity constraints and unprecedented demand for our communications products.
"I couldn't be more proud of what our people accomplished this past year. We completed the separation from Hewlett-Packard Company; turned in great financial results; brought out a lot of innovative new products; and launched companywide initiatives to align our systems, processes and rewards with our long-term business objectives. In the fourth quarter, we continued to build a very strong foundation for future growth in our strategic markets: communications and life sciences."
For the fourth quarter, diluted net earnings per share grew 69 percent to 66 cents. This includes the benefit of 17 cents from the sale of a portfolio of leased assets to The CIT Group Inc., offset by the 3-cent impact of the restructuring of the Healthcare Solutions Group announced in August. Compared to last year's fourth quarter, orders increased 24 percent; net revenue increased 38 percent, and net earnings rose 109 percent. Excluding the impact of the CIT sale and restructuring, net revenue increased 29 percent, and net earnings rose 63 percent for the quarter.
"We're very pleased with our results in our fourth quarter," said Barnholt. "We achieved strong order and revenue growth overall, especially in our businesses that serve the communications market. We were well ahead of the consensus estimates and guidance, even before the benefit of the CIT transaction. This quarter we made excellent progress on addressing parts shortages and increasing our capacity."
During the fourth quarter, orders from Agilent's communications and electronics businesses rose 32 percent. Net revenue for these businesses increased 59 percent compared to same period last year. These businesses comprise about 80 percent of the company's orders and revenue.
Growth in communications and electronics was driven by the continuing progress of network-equipment manufacturers, component manufacturers and service providers to build the next-generation communications infrastructure. Revenue growth was very strong for electronic-manufacturing test, optical-component test, system-on-a-chip test, wireless and fiber-optics test, and communications-test solutions. Revenue growth also was strong for components in wireless, fiber optics, networking and imaging.
The company's bioscience products are gaining strong market acceptance, and Agilent continues to increase investments for the life-sciences market.
The healthcare solutions business achieved record order performance in the fourth quarter, with orders strong across all geographies. On Nov. 17, Agilent and Royal Philips Electronics announced that Philips will acquire Agilent's Healthcare Solutions Group. Agilent believes that the combination of its business with Philips will create a broad product offering necessary for success in the healthcare market.
"We're now more focused on achieving strong, profitable growth in communications and life sciences," said Barnholt. "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.
"Going forward, our top priority is to execute our plans to achieve our growth and performance goals. For fiscal 2001, we're still comfortable with our guidance of at least 20 percent growth in net revenue, and net earnings about 8 percent of net revenue. For the first quarter of 2001, we believe that the EPS consensus estimate of about 45 cents is realistic."
The guidance for fiscal 2001 and the first quarter of 2001 takes into account the transactions with CIT and assumes the existing company structure that includes the Healthcare Solutions Group.
About Agilent Technologies
Agilent Technologies, Inc. (NYSE:A) is a diversified technology company, resulting from Hewlett-Packard Company's plan to strategically realign itself into two fully independent companies. With approximately 47,000 employees serving customers in more than 120 countries, Agilent Technologies is a global leader in designing and manufacturing test, measurement and monitoring instruments, systems and solutions, and semiconductor and optical components. The company serves markets that include communications, electronics, life sciences and healthcare. In fiscal year 2000, the businesses comprising Agilent had net revenue of $10.8 billion.
Information about Agilent Technologies can be found on the Web at www.agilent.com.
More financial information about this quarter's earnings is available at investor.agilent.com.
Agilent will host a live webcast in listen-only mode at: nyse.com and investor.agilent.com The webcast will remain available on the company's Web site.
A telephone replay of the conference call will be available at 4:00 P.M. (PST) on Nov. 20 through 4:00 P.M. (PST) Nov. 27. The replay number is (719) 457-0820, and pass-code is 576046.
This news release contains forward-looking statements (including, without limitation, information regarding projected net revenue, net earnings and net earnings per share) that involve risks and uncertainties that could cause the 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 identify and execute successfully through industry business cycles; shortages of critical parts; the timely ability to ramp manufacturing capacity to meet order demand; the ability to quickly adapt cost structures to changing conditions, including absorption of the fixed costs allocated to the Healthcare Solutions Group; the successful completion of the sale and transition of its Healthcare Solutions Group to Royal Philips Electronics; the economic, political and other risks associated with international sales and operations; the successful redesign and implementation of the company's business process and systems; and other risks detailed in Agilent's Annual Report on Form 10-K for the year ended October 31, 1999, and its Quarterly Report on Form 10-Q for the quarter ended July 31, 2000, as filed with the Securities and Exchange Commission.
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited)
(In millions, except per share amounts) Three Months Ended
October 31,
-------------------- Percent
2000 1999 Inc/(Dec)
--------- --------- ---------
Orders $ 3,141 $ 2,541 24%
Net revenue $ 3,372 $ 2,448 38%
Costs and expenses:
Cost of products and services 1,732 1,292 34%
Research and development 354 292
Selling, general and administrative 828 659
--------- ---------
Total costs & expenses 2,914 2,243 30%
--------- ---------
Earnings from operations 458 205 123%
Other income (expense), net 10 19 (47%)
--------- ---------
Earnings before taxes 468 224 109%
Provision for taxes 163 78 109%
--------- ---------
Net earnings $ 305 $ 146 109%
========= =========
Basic net earnings per share $ 0.67 $ 0.39
========= =========
Diluted net earnings per share $ 0.66 $ 0.39
========= =========
Average shares used in
computing net earnings per share:
Basic 454 380
Diluted 462 380
AGILENT TECHNOLOGIES, INC.
EARNINGS BEFORE GOODWILL CALCULATION
(Unaudited)
(In millions, except per share amounts) Three Months Ended
October 31,
--------------------
2000 1999
--------- ---------
Earnings before taxes $ 468 $ 224
Goodwill amortization 35 11
--------- ---------
Earnings before goodwill and taxes 503 235
Provision for taxes 167 81
--------- ---------
Earnings before goodwill (EBG) $ 336 $ 154
========= =========
Basic EBG per share $ 0.74 $ 0.41
========= =========
Diluted EBG per share $ 0.73 $ 0.41
========= =========
Average shares used in
computing net EBG per share:
Basic 454 380
Diluted 462 380
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited)
(In millions, except
per share amounts) Twelve Months Ended
October 31,
------------------- Percent
2000 1999 Increase
--------- --------- --------
Orders $ 11,981 $ 8,878 35%
Net revenue $ 10,773 $ 8,331 29%
Costs and expenses:
Cost of products and services 5,522 4,388 26%
Research and development 1,258 997
Selling, general and administrative 2,940 2,205
--------- ---------
Total costs & expenses 9,720 7,590 28%
--------- ---------
Earnings from operations 1,053 741 42%
Other income (expense), net 111 46 141%
--------- ---------
Earnings before taxes 1,164 787 48%
Provision for taxes 407 275 48%
--------- ---------
Net earnings $ 757 $ 512 48%
========= =========
Basic net earnings per share $ 1.68 $ 1.35
========= =========
Diluted net earnings per share $ 1.66 $ 1.35
========= =========
Average shares used in
computing net earnings per share:
Basic 449 380
Diluted 455 380
Unaudited pro forma net
earnings per share:
Basic $ 1.67
Diluted $ 1.63
Average shares used in
computing unaudited pro forma
net earnings per share:
Basic (1) 453
Diluted (2) 464
(1) Unaudited pro forma basic earnings per share were calculated using
weighted average shares outstanding for the twelve-month period
including the 72,000,000 shares issued in Agilent Technologies'
initial public offering and assuming they were outstanding for the
entire period.
(2) Unaudited pro forma diluted earnings per share were calculated
using weighted average shares outstanding for the twelve-month
period including the 72,000,000 shares issued in Agilent
Technologies' initial offering and assuming they were outstanding
for the entire period. In addition, the calculation included the
dilutive impact of outstanding stock options and also assumed that
HP stock and options converted to Agilent stock and options were
outstanding for the entire twelve-month period.
AGILENT TECHNOLOGIES, INC.
EARNINGS BEFORE GOODWILL CALCULATION
(Unaudited)
(In millions, except per share amounts) Twelve Months Ended
October 31,
-------------------
2000 1999
--------- ---------
Earnings before taxes $ 1,164 $ 787
Goodwill amortization 84 37
--------- ---------
Earnings before goodwill and taxes 1,248 824
Provision for taxes 414 283
--------- ---------
Earnings before goodwill (EBG) $ 834 $ 541
========= =========
Basic EBG per share $ 1.86 $ 1.42
========= =========
Diluted EBG per share $ 1.83 $ 1.42
========= =========
Average shares used in
computing net EBG per share:
Basic 449 380
Diluted 455 380
AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(In millions, except par value and share amounts)
October 31,
-----------------
2000 1999
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 996 $ -
Accounts receivable 2,201 1,635
Inventory 1,853 1,499
Other current assets 605 404
-------- --------
Total current assets 5,655 3,538
Property, plant and equipment, net 1,741 1,387
Other assets 1,029 519
-------- --------
Total assets $ 8,425 $ 5,444
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 857 $ 510
Notes payable and short-term debt 110 -
Employee compensation and benefits 699 550
Deferred revenue 372 241
Accrued income taxes
and other accrued liabilities 720 380
-------- --------
Total current liabilities 2,758 1,681
-------- --------
Other liabilities 402 381
Commitments and contingencies
Stockholders' equity:
Preferred stock; $0.01 par value;
125,000,000 shares authorized;
none issued and outstanding
Common stock; $0.01 par value; 2,000,000,000
shares authorized; 453,976,000 shares
at October 31, 2000 5 4
and 380,000,000 shares at October 31, 1999
issued and outstanding
Additional paid-in capital 4,508 3,378
Retained earnings 757 -
Accumulated comprehensive loss (5) -
-------- --------
Total stockholders' equity 5,265 3,382
-------- --------
Total liabilities and
stockholders' equity $ 8,425 $ 5,444
======== ========
AGILENT TECHNOLOGIES, INC.
ORDERS, NET REVENUE AND EARNINGS (LOSS) FROM
OPERATIONS BY BUSINESS SEGMENT
(Unaudited)
(In Millions)
For the three months
ended October 31 Yr vs.Yr Sequential
2000 1999 %change %change
ORDERS ----------------------------------------
Test and measurement $ 1,870 $ 1,422 32% 1%
Semiconductor products 593 442 34% (19%)
Healthcare solutions 395 391 1% 24%
Chemical analysis 283 286 (1%) 5%
-------- -------- -------- --------
Total $ 3,141 $ 2,541 24% (1%)
======== ======== ======== ========
NET REVENUE
Test and measurement $ 2,048 $ 1,226 67% 35%
Semiconductor products 678 492 38% 15%
Healthcare solutions 355 458 (22%) 11%
Chemical analysis 291 272 7% 18%
-------- -------- -------- --------
Total $ 3,372 $ 2,448 38% 26%
======== ======== ======== ========
EARNINGS (LOSS) FROM OPERATIONS
Test and measurement $ 419 $ 104 303% 159%
Semiconductor products 82 52 58% (17%)
Healthcare solutions (43) 39 (210%) 8%
Chemical analysis 18 13 38% n/m
Corporate and other (18) (3) 500% n/m
-------- -------- -------- --------
Total $ 458 $ 205 123% 118%
======== ======== ======== ========
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.
ORDERS, NET REVENUE AND EARNINGS (LOSS) FROM
OPERATIONS BY BUSINESS SEGMENT
(Unaudited)
(In Millions)
For the twelve months
ended October 31 Yr vs.Yr
2000 1999 %change
----------------------------------
ORDERS
Test and measurement $ 7,002 $ 4,580 53%
Semiconductor products 2,511 1,796 40%
Healthcare solutions 1,415 1,492 (5%)
Chemical analysis 1,053 1,010 4%
-------- -------- --------
Total $ 11,981 $ 8,878 35%
======== ======== ========
NET REVENUE
Test and measurement $ 6,108 $ 4,082 50%
Semiconductor products 2,213 1,722 29%
Healthcare solutions 1,412 1,501 (6%)
Chemical analysis 1,040 1,026 1%
-------- -------- --------
Total $ 10,773 $ 8,331 29%
======== ======== ========
EARNINGS (LOSS) FROM OPERATIONS
Test and measurement $ 898 $ 377 138%
Semiconductor products 270 133 103%
Healthcare solutions (96) 125 (177%)
Chemical analysis 24 112 (79%)
Corporate and other (43) (6) n/m
-------- -------- --------
Total $ 1,053 $ 741 42%
======== ======== ========
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 Q4 ORDERS AND NET REVENUE BY MARKET SEGMENT
(Unaudited)
Orders Revenue
------------------ ------------------
% Change % of % Change % of
Y/Y Segment Y/Y Segment
------------------ ------------------
Test and measurement
--------------------
Communications test 41% 64% 53% 60%
General purpose test 126% 24% 82% 26%
Semiconductor test (5%) 12% 36% 14%
-------- --------
100% 100%
======== ======== ======== ========
Semiconductor products
----------------------
Networking and computing 50% 45% 43% 39%
Wireless 21% 14% 59% 15%
Imaging 66% 27% 60% 32%
Core opto business 13% 14% 21% 14%
-------- --------
100% 100%
======== ======== ======== ========
This analysis excludes the impact of Agilent's sale of a portfolio of
leased assets to the CIT Group Inc.
AGILENT TECHNOLOGIES, INC.
ORDERS AND NET REVENUE FROM OPERATIONS BY GEOGRAPHY
(Unaudited)
(Percent)
For the three months (In millions) ------------------
ended October 31 -------- -------- USD Currency
2000 1999 Growth Growth
-------- -------- -------- --------
ORDERS
United States $ 1,513 $ 1,144 32% 32%
Europe 587 490 20% 30%
Asia Pacific 841 736 14% 9%
Latin America 89 71 25% 23%
Canada 111 100 11% 12%
-------- --------
Total $ 3,141 $ 2,541 24% 25%
======== ========
NET REVENUE
United States $ 1,592 $ 1,082 47%
Europe 627 506 24%
Asia Pacific 936 708 32%
Latin America 118 88 34%
Canada 99 64 55%
-------- --------
Total $ 3,372 $ 2,448 38%
======== ========
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.
CONTACT:
Agilent Technologies Inc.
Steve Beitler, 650/752-5246
steve-beitler@agilent.com
Mary Lou Simmermacher, 650/752-5283
marylou-simmermacher@agilent.com
Hilliard Terry, 650/752-5329, (Analyst)
hilliard-terry@agilent.com
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