Agilent Technologies (NYSE: A) easily surpassed analyst estimates in the fourth quarter.
After market close Thursday, the former Hewlett-Packard subsidiary reported fiscal fourth quarter net income of $146 million, or 39 cents per share, for its first quarterly report since going public last month. First Call's survey of five analysts predicted a profit of 32 cents per share for the quarter ended Oct. 31.
Shares of Agilent rose to 47 1/4 in afterhours trading. The stock closed Thursday's regular trading at 45 7/16 prior to the earnings report.
Fourth quarter revenue rose to $2.4 billion, a 23 percent gain year-over-year. Income from operations totaled $205 million. Gross margin improved to 47.2 percent.
Test and measurement equipment sales rose 30 percent year-over-year to $1.2 billion, largely fueled by devices for wireless communications, optical network and broadband network markets. The company also reported especially strong demand for systems for testing flash memory, radio frequency circuits and systems-on-a-chip. Revenue from communications solutions missed the company's goals.
Semiconductor products grew to $492 million, a 30 percent gain from a year ago. Medical equipment revenue also rose 30 percent, to $458 million. Chemical analysis equipment increased 7 percent year-over-year to $272 million.
For the full year, Agilent earned $512 million on revenue of $8.3 billion. The company has a revenue goal of $9.4 billion, or 13 percent growth, for fiscal 2000, said Edward W. Barnholt, president and CEO of Agilent.
Asia's economic recovery and an overall improvement in demand from the semiconductor field provide grounds for optimism, Barnholt said. Total orders in the fourth quarter rose to $2.5 billion, a 31 percent gain from a year earlier.
"We're encouraged by the improvement in our results in the fourth quarter and the second half of the year," Barnholt said. "Our major businesses are entering the first quarter of the new fiscal year with good order momentum and strong new products. In addition, we are continuing to identify and implement ways to improve our cost structures."
Agilent's operating expenses were 38.4 percent of revenue in fiscal 1999, including 26.4 percent for selling, general and administartive costs and 12 percent for research and development.
The company will spend $140 million to boost brand awareness in fiscal 2000, CFO Bob Walker said. Agilent also expects to spend $250 million to $300 million next year to set up systems and programs that were previously shared with H-P. Those moves will help Agilent cut expenses, especially in fiscal 2001, Walker added.>