Agilent Technologies(US:A)2023-08-30 22:47Revenue Performance - Net revenue for the three months ended July 31, 2023, was $1,672 million, a decrease of 3% compared to the same period last year, while net revenue for the nine months increased by 3% to $5,145 million [159]. - Revenue from products decreased by 6% to $1,222 million for the three months ended July 31, 2023, but increased by 1% to $3,819 million for the nine months [170]. - Services and other revenue increased by 9% to $450 million for the three months ended July 31, 2023, and by 8% to $1,326 million for the nine months [172]. - Total net revenue for the three months ended July 31, 2023, was $1,672 million, a decrease of 3% compared to $1,718 million for the same period last year [173]. - Life sciences and applied markets revenue decreased by 9% to $927 million for the three months ended July 31, 2023, while increasing by 1% to $2,928 million for the nine months ended July 31, 2023 [190]. - Diagnostics and genomics revenue increased by 3% to $349 million for the three months ended July 31, 2023, and by 2% to $1,053 million for the nine months ended July 31, 2023 [174]. - Agilent CrossLab revenue increased by 10% to $396 million for the three months ended July 31, 2023, and by 9% to $1,164 million for the nine months ended July 31, 2023 [175]. - Revenue for the nine months ended July 31, 2023, decreased 2% in the Americas, increased 3% in Europe, and increased 3% in Asia Pacific compared to the same period last year [192]. - Revenue growth in the chemicals and advanced materials market was driven by strength in spectroscopy, gas chromatography, liquid chromatography, and consumables businesses [194]. - Revenue for the nine months ended July 31, 2023, increased 6% in the Americas, decreased 1% in Europe, and decreased 10% in Asia Pacific compared to the same period last year [205]. Income and Expenses - Net income for the three months ended July 31, 2023, was $111 million, down from $329 million in the same period last year, while net income for the nine months was $765 million compared to $886 million [161]. - Income from operations decreased by $278 million or 68% to $133 million for the three months ended July 31, 2023, compared to $411 million for the same period last year [180]. - Total gross margin for the three months ended July 31, 2023, was 39.3%, a decrease of 15 percentage points from 54.7% in the same period last year [177]. - Operating margin for the three months ended July 31, 2023, decreased by 1 percentage point to 29.9%, while for the nine months it increased by 1 percentage point to 29.2% [199]. - Selling, general and administrative expenses decreased by 1% to $407 million for the three months ended July 31, 2023, while increasing by 2% to $1,241 million for the nine months ended July 31, 2023 [179]. - Research and development expenses increased by 2% to $118 million for the three months ended July 31, 2023, and by 6% to $367 million for the nine months ended July 31, 2023 [178]. - Research and development expenses for the three months ended July 31, 2023, decreased by 4%, while for the nine months they increased by 3% [197]. - Selling, general and administrative expenses decreased by 10% for the three months and by 1% for the nine months ended July 31, 2023 [198]. Cash Flow and Capital Management - Cash provided by operations for the nine months ended July 31, 2023, was $1,256 million, an increase from $864 million in the same period last year [161]. - The company repurchased 2.812 million shares for $335 million during the three months ended July 31, 2023, and 3.256 million shares for $396 million during the nine months [163]. - The 2023 repurchase program authorizes the purchase of up to $2.0 billion of common stock, with approximately $1.604 billion remaining as of July 31, 2023 [163]. - The company paid cash dividends of $0.675 per common share, totaling $199 million during the nine months ended July 31, 2023 [233]. - The company expects total capital expenditures for the current year to be approximately $300 million, primarily for the expansion of its nucleic acid solutions production facility [228]. - Cash and cash equivalents as of July 31, 2023, were $1,329 million, up from $1,053 million as of October 31, 2022 [222]. - Net cash inflow from operating activities for the nine months ended July 31, 2023, was $1,256 million, compared to $864 million for the same period in 2022 [225]. Market Conditions and Outlook - The company anticipates a challenging macroeconomic environment, particularly in China, but remains optimistic about long-term growth opportunities in key end markets [164]. - The company remains optimistic about long-term growth opportunities in life sciences and applied markets despite current macroeconomic challenges [195]. - The company experienced declines in life sciences and applied markets segments primarily due to weaker demand in China compared to the same period last year [159]. - The revenue decline in Asia Pacific was mainly driven by a significant revenue decline in China due to weakness in the overall economy [191]. - For the three months ended July 31, 2023, revenue declined significantly in the pharmaceutical market, primarily due to weakness in liquid chromatography and cell analysis businesses [193]. Foreign Exchange and Interest Rate Risks - Foreign currency movements negatively impacted revenue growth by 1 percentage point for the three months and 3 percentage points for the nine months ended July 31, 2023 [159]. - Approximately 52% of the company's revenue was generated in U.S. dollars during the nine months ended July 31, 2023, with a 3 percentage point decrease in revenue attributed to unfavorable foreign currency exchange rates [243]. - A hypothetical 10% adverse movement in foreign exchange rates would not have a material effect on the company's financial position as of July 31, 2023 [245]. - The company is exposed to interest rate risk due to the mismatch between fixed interest expense on loans and variable interest income from cash and short-term investments [245]. - A hypothetical 10% adverse movement in interest rates would result in an immaterial impact on the fair value of the company's fixed interest rate debt as of July 31, 2023 [246].