Agilent Falls Short of Expectations
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By THE ASSOCIATED PRESS
Filed at 6:53 p.m. ET
SAN FRANCISCO (AP) -- Agilent
Technologies' second-quarter earnings
plunged 69 percent and fell short of Wall
Street's lowered expectations, as the test and
measurement equipment maker suffered
dramatically from the economic slowdown.
Adding to the bad news pouring out of the high-tech world, Agilent warned
Thursday that a huge net loss in the current quarter is likely, with revenue expected
to drop from the second quarter.
``Frankly, the speed and severity of the downturn are unlike anything I've seen in 34
years in the business,'' CEO and President Ned Barnholt said on a conference call
with analysts.
In the three months ended April 30, Agilent earned $51 million, or 11 cents per
share, down from $165 million, or 35 cents per share, in the same period of 2000.
Revenue increased 10 percent, however, to $2.74 billion from $2.48 billion.
Without the $100 million cost the company incurred as weak demand increased
inventory reserves, Agilent would have earned 26 cents per share. Analysts
surveyed by Thomson Financial/First Call were expecting 27 cents per share.
Agilent shares rose 22 cents to $38.72 on the New York Stock Exchange before
the earnings report. In the after-hours session, shares were down $4.42 to $34.30.
Palo Alto-based Agilent -- which was spun off from Hewlett-Packard Co. in 1999
-- saw a sharp decline in orders in the quarter, especially in the communications and
semiconductor markets. About $500 million worth of orders were canceled
altogether.
Agilent had warned April 5 that earnings would be lower than expected and
announced it was cutting all 48,000 employees' pay by 10 percent. Barnholt said
Thursday that Agilent also has temporarily halted manufacturing at times and
stopped filling open positions.
Barnholt said Agilent is ``prepared to take further actions if conditions warrant,'' but
he added that the cost-cutting measures in place are preferable to layoffs.
Barnholt said the steep order decline and uncertain business environment likely will
push revenue as low as $2 billion in the third quarter. That should lead to a net loss
between 20 cents and 30 cents per share, including 5 cents per share for
restructuring. Wall Street's consensus estimate is for a profit of 25 cents, excluding
one-time events, according to Thomson Financial/First Call.
``While accurate predictions are extremely difficult, we feel we are at or near
bottom and may see an improvement in orders later in the second half,'' said
Barnholt, who added that the company expects to return to profitability in the fourth
quarter.
``We remain optimistic about the future of our company,'' Barnholt said. ``We
believe that the markets we're in have a bright long-term outlook, and we're focused
in the high-growth segments within these markets.''
In the first half of fiscal 2001, Agilent earned $288 million, or 62 cents per share, off
7 percent from a profit of $308 million, or 67 cents per share, in the same period
last year. Revenue was up 18 percent, to $5.6 billion from $4.7 billion. |
