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It has been about a month since the last earnings report for Agilent Technologies (A). Shares have added about 11.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Agilent due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Agilent Earnings and Revenues Beat Estimates in Q3
Agilent Technologies’ fiscal third-quarter 2019 earnings of 76 cents per share surpassed the Zacks Consensus Estimate by 4 cents. The bottom line increased 7% sequentially and 13% year over year.
Fiscal third-quarter 2019 revenues of $1.27 billion increased 6% year over year (up 6% on a core basis). Also, reported revenues, which came in above management’s guided range of $1.225-$1.245, surpassed the Zacks Consensus Estimate of $1.239 billion.
The year-over-year revenue growth was driven by strength in the pharma, diagnostics, environmental and forensics markets.
During the quarter, Agilent entered into a definitive agreement to acquire Winooski, VT-based BioTek Instruments, Inc., a provider of life science instrumentation, in a bid to expand presence in the life science research space.
The deal will strengthen Agilent’s offerings related to live cell analysis as these product lines aid in quantification of biomolecules, biomolecular interactions and cellular structure.
Revenues by Segment
Agilent has three reporting segments — Life Sciences & Applied Markets Group (LSAG), Agilent Cross Lab Group (ACG) and Diagnostics and Genomics Group (DGG).
In the reported quarter, LSAG was the largest contributor to total revenues. The segment accounted for $544 million or 43% of its total revenues, reflecting an increase of 1% from the prior-year quarter. The demand in pharma, environmental and forensics markets was strong, offset by weakness in the food market.
Revenues from ACG came in at $467 million, accounting for 37% of total revenues, reflecting a 10% year-over-year increase, driven by growth across all regions and market segments.
Revenues from DGG came in at $263 million, accounting for the remaining 20% of total revenues. The segment’s revenues were up 11% from the year-ago quarter, led by strength in the company’s Nucleic Acid Solutions Division, diagnostics and clinical markets.
Operating Results
Gross margin in the quarter was 54.3%, down 50 basis points (bps) year over year. The decrease was due to an unfavorable product mix.