Agilent Technologies Conference Call Highlights

Agilent Technologies Inc (NYSE: A) reported its fourth quarter earnings on Friday. Shares of the company are down one percent.

Below are some key highlights from its conference call.

• Reported Q4 revenues of $1.81 billion, operating margin of 20.7%, and earnings per share of $0.88.
• Keysight Technologies discussed their performance and outlook in a separate call earlier today.
• Accordingly, the rest of the numbers we will share today deal exclusively with Agilent's performance in Life Sciences, Diagnostics and Applied Markets.
• New Agilent reported record fourth quarter revenues and orders.
• Revenue of $1.04 billion increased 3% versus last year. Orders of $1.15 billion were up 5% over a year ago.
• Operating margin was 20.4%. Book-to-bill was 1.1.

Three major Accomplishments:

• First, we completed the separation of the company.
• The Keysight and Agilent teams executed a flawless separation of the company without impacting the day-to-day business of either company.
• We've created two companies with greater strategic and management focus with each company well positioned for growth.
• Long-term shareholder value in their respective markets.
• Second, during the quarter, Agilent retired an additional $500 million of debt to maintain our leverage at a level consistent with our current investment-grade rating.
• We named a new CEO.
• In September, we announced that Mike McMullen had been named Agilent's President, Chief Operating Officer, and CEO-elect.
• Mike will become CEO on March 18, 2015, the day of the Annual Shareholders Meeting.
• With the separation now complete, this is the perfect time to name the new CEO for the new Agilent.

Financial Metrics:

• LDA, our new Agilent's fourth quarter revenues came in at $1.04 billion, or 3% growth year-over-year.
• Unfavorable currency, lower NMR revenues and late orders drove the difference from August guidance of $1.08 billion at the midpoint.
• As reminder, in October, we announced our exit from the NMR instrument business.
• We're no longer taking NMR instrument orders, and our current backlog will ship in 2015.
• Excluding NMR and currency effects, each having a negative one-percentage point impact on reported growth, revenues grew 5% and orders grew 8% compared to a year ago.
• Within the Life Sciences and Applied Markets, Pharma and Biotech was up 5%, driven by equipment refreshes from large and mid-sized pharma customers and continued specialty pharma demand.
• Life Sciences Research or Academia and Government, was up 4% again this quarter, driven by improved government spending in the U.S. and China.
• Government spending, particularly in the U.S. and China, contributed to growth in Forensics, up 6%; Food Testing, up 4%; and Environmental, up 2%.
• Chemical and Energy revenues remained relatively flat, growing 1%.
• Our Life Sciences team introduced a number of key new products in the past quarter.
• The 1290 Infinity II LC System sets a new benchmark in analytical, instrument and laboratory efficiency.
• We will deploy capital for long-term shareholder value with an expected return of $500 million to shareholders in fiscal year 2015.
• We will focus on sustaining share growth within the core Analytical Lab.
• We will continue to bring innovative new offerings to the marketplace and expand our lab-wide services and consumables with a truly differentiated customer experience.
• We will leverage this strength in the Analytical Lab to drive growth in the fast-growing genomics, clinical research and diagnostic markets.

Guidance:

• Agilent's revenues for the fiscal first quarter of 2015 are expected to range from $1.02 billion to $1.04 billion, for 2.2% reported growth or 4.9% core growth at the midpoint.
• We expect first quarter earnings per share from $0.39 to $0.43. For the full year.
• We expect revenue in the range from $4.12 billion to $4.18 billion, and earnings per share from $1.68 to $1.78.