Agilent Profit Tops Street, Cuts FY Outlook; Stock Tumbles

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(RTTNews.com) - Scientific instruments maker Agilent Technologies Inc. ( A ), Thursday reported a higher fourth-quarter profit, helped by a tax benefit even as revenues marginally dropped due to a slump at its electronic measurement segment. Quarterly earnings topped Wall Street estimates while revenues fell shy of expectations.

Agilent, which is splitting off later this year, provided a bleak outlook for the second quarter and slashed its expectations for 2014, citing weakness in the aerospace and defense markets.

"Our life sciences, diagnostics and applied market businesses got off to a solid start in the quarter. Electronic measurement, however, faced challenges in the aerospace/defense market," said CEO Bill Sullivan.

Agilent provides bio-analytical and electronic measurement solutions to a range of industries.

The Santa Clara, California-based company reported first-quarter net income of $195 million or $0.58 per share, compared with $179 million or $0.51 per share last year.

Excluding items, adjusted earnings for the quarter were $226 million or $0.67 per share, compared with $222 million or $0.63 per share in the prior year.

On average, 15 analysts polled by Thomson Reuters expected earnings of $0.66 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter were marginally lower at $1.679 billion, compared with last year. Thirteen analysts had a consensus revenue estimate of $1.69 billion.

Agilent has been facing revenue pressure for the past quarters. While the company has raised its business in Asia, it has been subdued in the volatile European region.

Among segments, Electronic Measurement revenue for the quarter slid 7 percent year-over-year. Chemical Analysis revenue was 6 percent, led by food and forensics markets. Life Sciences and Diagnostic revenue climbed 5 percent, on strength in pharma and diagnostics/clinical markets.

Results were helped by an income tax benefit of $4 million, compared with an expense of $16 million last year.

Operating expenses marginally declined to $1.46 billion but was offset by a $4 million increase in interest expense, Agilent said.

Orders at the end of the quarter were down 2 percent from last year at $1.68 billion.

For the second quarter, Agilent projects earnings of $0.71 to $0.73 per share on revenues of $1.72 billion to $1.74 billion. Analysts currently expect earnings of $0.81 per share on revenues of $1.78 billion.

For fiscal 2014, Agilent now expects adjusted earnings of $2.96 to $3.16 per share on revenues of $6.90 billion to $7.10 billion. The company earlier estimated earnings of $3.03 to $3.33 per share on revenues of $6.95 billion to $7.15 billion.

Analysts currently expect earnings of $3.19 per share on revenues of $7.05 billion for the year.

In September, Agilent said it will separate into two publicly traded firms to spur growth. The process is expected to be completed by this November. But investors are cautious about the split off, wondering whether Agilent can stave off competition from Danaher ( DHR ) and new entrants like General Electric ( GE ).

Agilent stock closed Thursday at $60.14, up $0.25 or 0.42%, on a volume of 1.4 million shares on the NYSE. In after hours, the stock dropped $3.63 or 6.04% at $56.45. In the past year, the stock has traded in the range of $40.19 - $61.22.

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