Intrinsic value of Agilent Technologies - A

Previous Close

$64.66

  Intrinsic Value

$67.60

stock screener

  Rating & Target

hold

+5%

Previous close

$64.66

 
Intrinsic value

$67.60

 
Up/down potential

+5%

 
Rating

hold

We calculate the intrinsic value of A stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 20.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.07
Revenue, $m
  4,758
  5,056
  5,366
  5,689
  6,026
  6,377
  6,743
  7,126
  7,525
  7,942
  8,378
  8,834
  9,310
  9,809
  10,331
  10,877
  11,449
  12,048
  12,676
  13,334
  14,023
  14,746
  15,503
  16,298
  17,131
  18,005
  18,921
  19,883
  20,891
  21,950
Variable operating expenses, $m
  795
  826
  858
  892
  927
  964
  1,002
  1,042
  1,084
  1,128
  877
  924
  974
  1,026
  1,081
  1,138
  1,198
  1,261
  1,326
  1,395
  1,467
  1,543
  1,622
  1,705
  1,792
  1,884
  1,980
  2,080
  2,186
  2,297
Fixed operating expenses, $m
  2,998
  3,063
  3,131
  3,200
  3,270
  3,342
  3,416
  3,491
  3,568
  3,646
  3,726
  3,808
  3,892
  3,978
  4,065
  4,155
  4,246
  4,339
  4,435
  4,532
  4,632
  4,734
  4,838
  4,945
  5,053
  5,165
  5,278
  5,394
  5,513
  5,634
Total operating expenses, $m
  3,793
  3,889
  3,989
  4,092
  4,197
  4,306
  4,418
  4,533
  4,652
  4,774
  4,603
  4,732
  4,866
  5,004
  5,146
  5,293
  5,444
  5,600
  5,761
  5,927
  6,099
  6,277
  6,460
  6,650
  6,845
  7,049
  7,258
  7,474
  7,699
  7,931
Operating income, $m
  966
  1,167
  1,377
  1,597
  1,829
  2,071
  2,325
  2,593
  2,873
  3,168
  3,775
  4,101
  4,444
  4,805
  5,185
  5,584
  6,005
  6,448
  6,915
  7,406
  7,924
  8,469
  9,043
  9,648
  10,285
  10,956
  11,663
  12,408
  13,193
  14,019
EBITDA, $m
  1,651
  1,876
  2,112
  2,359
  2,617
  2,888
  3,173
  3,471
  3,784
  4,113
  4,459
  4,822
  5,204
  5,605
  6,028
  6,472
  6,939
  7,431
  7,949
  8,494
  9,068
  9,672
  10,308
  10,978
  11,683
  12,425
  13,207
  14,030
  14,897
  15,810
Interest expense (income), $m
  82
  97
  109
  121
  134
  147
  161
  175
  190
  206
  222
  239
  257
  276
  295
  315
  337
  359
  383
  407
  433
  460
  488
  517
  548
  581
  615
  651
  688
  727
  769
Earnings before tax, $m
  869
  1,058
  1,256
  1,464
  1,682
  1,910
  2,150
  2,402
  2,668
  2,946
  3,536
  3,844
  4,168
  4,510
  4,869
  5,248
  5,646
  6,066
  6,508
  6,974
  7,464
  7,981
  8,526
  9,100
  9,704
  10,342
  11,013
  11,720
  12,465
  13,250
Tax expense, $m
  235
  286
  339
  395
  454
  516
  581
  649
  720
  795
  955
  1,038
  1,125
  1,218
  1,315
  1,417
  1,524
  1,638
  1,757
  1,883
  2,015
  2,155
  2,302
  2,457
  2,620
  2,792
  2,973
  3,164
  3,366
  3,578
Net income, $m
  634
  772
  917
  1,068
  1,228
  1,394
  1,570
  1,754
  1,947
  2,151
  2,581
  2,806
  3,043
  3,292
  3,555
  3,831
  4,122
  4,428
  4,751
  5,091
  5,449
  5,826
  6,224
  6,643
  7,084
  7,549
  8,039
  8,556
  9,100
  9,673

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  7,458
  7,925
  8,411
  8,917
  9,445
  9,996
  10,570
  11,169
  11,795
  12,448
  13,132
  13,846
  14,593
  15,374
  16,192
  17,049
  17,945
  18,885
  19,868
  20,899
  21,980
  23,113
  24,300
  25,545
  26,851
  28,221
  29,657
  31,164
  32,745
  34,404
Adjusted assets (=assets-cash), $m
  7,458
  7,925
  8,411
  8,917
  9,445
  9,996
  10,570
  11,169
  11,795
  12,448
  13,132
  13,846
  14,593
  15,374
  16,192
  17,049
  17,945
  18,885
  19,868
  20,899
  21,980
  23,113
  24,300
  25,545
  26,851
  28,221
  29,657
  31,164
  32,745
  34,404
Revenue / Adjusted assets
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
  0.638
Average production assets, $m
  3,883
  4,126
  4,379
  4,642
  4,917
  5,204
  5,503
  5,815
  6,140
  6,481
  6,836
  7,208
  7,597
  8,004
  8,430
  8,876
  9,342
  9,831
  10,344
  10,880
  11,443
  12,033
  12,651
  13,299
  13,979
  14,692
  15,440
  16,224
  17,047
  17,911
Working capital, $m
  285
  303
  322
  341
  362
  383
  405
  428
  451
  477
  503
  530
  559
  589
  620
  653
  687
  723
  761
  800
  841
  885
  930
  978
  1,028
  1,080
  1,135
  1,193
  1,253
  1,317
Total debt, $m
  2,018
  2,244
  2,479
  2,723
  2,978
  3,244
  3,521
  3,811
  4,113
  4,429
  4,759
  5,104
  5,464
  5,842
  6,237
  6,651
  7,084
  7,537
  8,012
  8,510
  9,032
  9,579
  10,153
  10,754
  11,385
  12,047
  12,740
  13,468
  14,232
  15,033
Total liabilities, $m
  3,602
  3,828
  4,063
  4,307
  4,562
  4,828
  5,105
  5,395
  5,697
  6,013
  6,343
  6,688
  7,048
  7,426
  7,821
  8,235
  8,668
  9,121
  9,596
  10,094
  10,616
  11,163
  11,737
  12,338
  12,969
  13,631
  14,324
  15,052
  15,816
  16,617
Total equity, $m
  3,856
  4,097
  4,348
  4,610
  4,883
  5,168
  5,465
  5,774
  6,098
  6,436
  6,789
  7,158
  7,545
  7,949
  8,371
  8,814
  9,278
  9,763
  10,272
  10,805
  11,364
  11,949
  12,563
  13,207
  13,882
  14,590
  15,333
  16,112
  16,929
  17,787
Total liabilities and equity, $m
  7,458
  7,925
  8,411
  8,917
  9,445
  9,996
  10,570
  11,169
  11,795
  12,449
  13,132
  13,846
  14,593
  15,375
  16,192
  17,049
  17,946
  18,884
  19,868
  20,899
  21,980
  23,112
  24,300
  25,545
  26,851
  28,221
  29,657
  31,164
  32,745
  34,404
Debt-to-equity ratio
  0.520
  0.550
  0.570
  0.590
  0.610
  0.630
  0.640
  0.660
  0.670
  0.690
  0.700
  0.710
  0.720
  0.730
  0.750
  0.750
  0.760
  0.770
  0.780
  0.790
  0.790
  0.800
  0.810
  0.810
  0.820
  0.830
  0.830
  0.840
  0.840
  0.850
Adjusted equity ratio
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517
  0.517

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  634
  772
  917
  1,068
  1,228
  1,394
  1,570
  1,754
  1,947
  2,151
  2,581
  2,806
  3,043
  3,292
  3,555
  3,831
  4,122
  4,428
  4,751
  5,091
  5,449
  5,826
  6,224
  6,643
  7,084
  7,549
  8,039
  8,556
  9,100
  9,673
Depreciation, amort., depletion, $m
  685
  709
  735
  761
  789
  817
  847
  878
  911
  945
  684
  721
  760
  800
  843
  888
  934
  983
  1,034
  1,088
  1,144
  1,203
  1,265
  1,330
  1,398
  1,469
  1,544
  1,622
  1,705
  1,791
Funds from operations, $m
  1,319
  1,482
  1,651
  1,829
  2,016
  2,212
  2,417
  2,632
  2,858
  3,096
  3,265
  3,527
  3,803
  4,093
  4,398
  4,718
  5,056
  5,411
  5,785
  6,179
  6,593
  7,030
  7,489
  7,973
  8,482
  9,018
  9,583
  10,178
  10,804
  11,464
Change in working capital, $m
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  31
  33
  34
  36
  38
  39
  41
  43
  45
  48
  50
  52
  55
  58
  61
  64
Cash from operations, $m
  1,302
  1,464
  1,633
  1,810
  1,996
  2,191
  2,395
  2,609
  2,834
  3,071
  3,239
  3,500
  3,774
  4,063
  4,366
  4,686
  5,022
  5,375
  5,747
  6,139
  6,552
  6,986
  7,443
  7,925
  8,432
  8,966
  9,528
  10,120
  10,744
  11,400
Maintenance CAPEX, $m
  -365
  -388
  -413
  -438
  -464
  -492
  -520
  -550
  -581
  -614
  -648
  -684
  -721
  -760
  -800
  -843
  -888
  -934
  -983
  -1,034
  -1,088
  -1,144
  -1,203
  -1,265
  -1,330
  -1,398
  -1,469
  -1,544
  -1,622
  -1,705
New CAPEX, $m
  -234
  -243
  -253
  -264
  -275
  -287
  -299
  -312
  -326
  -340
  -356
  -372
  -389
  -407
  -426
  -446
  -467
  -489
  -512
  -537
  -563
  -590
  -618
  -648
  -680
  -713
  -748
  -785
  -823
  -864
Cash from investing activities, $m
  -599
  -631
  -666
  -702
  -739
  -779
  -819
  -862
  -907
  -954
  -1,004
  -1,056
  -1,110
  -1,167
  -1,226
  -1,289
  -1,355
  -1,423
  -1,495
  -1,571
  -1,651
  -1,734
  -1,821
  -1,913
  -2,010
  -2,111
  -2,217
  -2,329
  -2,445
  -2,569
Free cash flow, $m
  703
  832
  967
  1,109
  1,257
  1,412
  1,576
  1,747
  1,927
  2,116
  2,235
  2,444
  2,664
  2,896
  3,140
  3,397
  3,667
  3,952
  4,252
  4,568
  4,901
  5,252
  5,622
  6,012
  6,422
  6,855
  7,311
  7,792
  8,298
  8,832
Issuance/(repayment) of debt, $m
  217
  225
  235
  245
  255
  266
  277
  289
  302
  316
  330
  345
  361
  377
  395
  414
  433
  454
  475
  498
  522
  547
  574
  601
  631
  661
  694
  728
  764
  801
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  217
  225
  235
  245
  255
  266
  277
  289
  302
  316
  330
  345
  361
  377
  395
  414
  433
  454
  475
  498
  522
  547
  574
  601
  631
  661
  694
  728
  764
  801
Total cash flow (excl. dividends), $m
  920
  1,058
  1,202
  1,353
  1,512
  1,678
  1,853
  2,036
  2,229
  2,432
  2,565
  2,789
  3,025
  3,274
  3,535
  3,810
  4,100
  4,406
  4,727
  5,066
  5,423
  5,799
  6,196
  6,613
  7,053
  7,517
  8,005
  8,520
  9,062
  9,633
Retained Cash Flow (-), $m
  -230
  -241
  -251
  -262
  -273
  -285
  -297
  -310
  -324
  -338
  -353
  -369
  -386
  -404
  -423
  -443
  -464
  -486
  -509
  -533
  -559
  -586
  -614
  -644
  -675
  -708
  -743
  -779
  -817
  -858
Prev. year cash balance distribution, $m
  1,205
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  58
  62
  66
  70
  74
  78
  83
  88
  93
  98
  103
  109
  115
  121
  128
  134
  141
  149
  157
  165
  173
  182
  192
  202
  212
  223
  234
  246
  258
  272
Cash available for distribution, $m
  1,895
  816
  951
  1,091
  1,239
  1,394
  1,556
  1,727
  1,906
  2,094
  2,212
  2,420
  2,639
  2,870
  3,112
  3,368
  3,637
  3,920
  4,219
  4,533
  4,865
  5,214
  5,582
  5,969
  6,378
  6,809
  7,262
  7,741
  8,245
  8,776
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  1,817
  747
  827
  899
  960
  1,011
  1,051
  1,079
  1,095
  1,098
  1,050
  1,033
  1,003
  963
  914
  856
  791
  722
  650
  576
  503
  433
  366
  304
  248
  199
  156
  120
  90
  66
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Agilent Technologies, Inc. provides application focused solutions that include instruments, software, services and consumables for the entire laboratory workflow. The Company serves the life sciences, diagnostics and applied chemical markets. It has three business segments: life sciences and applied markets business, diagnostics and genomics business, and Agilent CrossLab business. Its life sciences and applied markets business segment offers instruments and software that enable customers to identify, quantify and analyze the physical and biological properties of substances and products, as well as enable customers in the clinical and life sciences research areas to interrogate samples at the molecular level. Its diagnostics and genomics business segment includes the reagent partnership, pathology, companion diagnostics, genomics and the nucleic acid solutions businesses. Its Agilent CrossLab business segment spans the entire lab with its consumables and services portfolio.

FINANCIAL RATIOS  of  Agilent Technologies (A)

Valuation Ratios
P/E Ratio 30.4
Price to Sales 4.7
Price to Book 4.3
Price to Tangible Book
Price to Cash Flow 23.4
Price to Free Cash Flow 29.2
Growth Rates
Sales Growth Rate 6.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 26.6%
Cap. Spend. - 3 Yr. Gr. Rate -3%
Financial Strength
Quick Ratio 13
Current Ratio 0.2
LT Debt to Equity 37.3%
Total Debt to Equity 41.6%
Interest Coverage 11
Management Effectiveness
Return On Assets 9.3%
Ret/ On Assets - 3 Yr. Avg. 7.1%
Return On Total Capital 10.5%
Ret/ On T. Cap. - 3 Yr. Avg. 8.2%
Return On Equity 15.1%
Return On Equity - 3 Yr. Avg. 11.5%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 53.9%
Gross Margin - 3 Yr. Avg. 52.2%
EBITDA Margin 24.5%
EBITDA Margin - 3 Yr. Avg. 21.7%
Operating Margin 18.8%
Oper. Margin - 3 Yr. Avg. 15.5%
Pre-Tax Margin 18%
Pre-Tax Margin - 3 Yr. Avg. 14.3%
Net Profit Margin 15.3%
Net Profit Margin - 3 Yr. Avg. 12.1%
Effective Tax Rate 14.8%
Eff/ Tax Rate - 3 Yr. Avg. 12.9%
Payout Ratio 24.9%

A stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the A stock intrinsic value calculation we used $4472 million for the last fiscal year's total revenue generated by Agilent Technologies. The default revenue input number comes from 2017 income statement of Agilent Technologies. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our A stock valuation model: a) initial revenue growth rate of 6.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for A is calculated based on our internal credit rating of Agilent Technologies, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Agilent Technologies.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of A stock the variable cost ratio is equal to 17.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2933 million in the base year in the intrinsic value calculation for A stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Agilent Technologies.

Corporate tax rate of 27% is the nominal tax rate for Agilent Technologies. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the A stock is equal to 1.3%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for A are equal to 81.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Agilent Technologies operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for A is equal to 6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4831 million for Agilent Technologies - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 322 million for Agilent Technologies is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Agilent Technologies at the current share price and the inputted number of shares is $20.8 billion.

Management's discussion and analysis

Agilent Technologies Inc. ("we", "Agilent" or the "company"), incorporated in Delaware in May 1999, is a global leader in life sciences, diagnostics and applied chemical markets, providing application focused solutions that includes instruments, software, services and consumables for the entire laboratory workflow.

In November 2015, we completed the acquisition of Seahorse Bioscience ("Seahorse"), a leader in providing instruments and assay kits for measuring cell metabolism and bioenergetics for $242 million in cash. Seahorse's technology enables researchers to better understand cell health, function and signaling, and how the cell may be impacted by the introduction of a specific drug, by providing real-time kinetics to unlock essential cellular bioenergetics data. The financial results of Seahorse have been included within Agilent's consolidated financial statements from November 1, 2015.

On March 2, 2016, Agilent made a preferred stock investment in Lasergen for $80 million. Agilent’s initial ownership stake was 48 percent and we have also joined the board of Lasergen and signed a collaboration agreement. We have the option to acquire all of the remaining shares of Lasergen until March 2, 2018, for additional consideration of $105 million. Lasergen is a Variable Interest Entity (“VIE”), however, we do not consolidate the entity in our financial statements because we do not have the power to direct the activities of the VIE that most significantly impact the VIE's economic performance nor are we the primary beneficiary. Because of the nature of the preferred stock of Lasergen that we own, we account for this investment under the cost method.

On August 1, 2016 we completed the acquisition of substantially all of the assets of iLab Solutions LLC ("iLab"), a cloud-based solutions provider for core laboratory management.  iLab's offerings enables customers to easily and accurately book time in shared facilities, to bill and invoice for projects, to manage studies, to generate reports and business intelligence, and to schedule instrument reservations across multiple projects. The purchase price was $26 million in cash. The financial results of iLab have been included within Agilent's consolidated financial statements from August 1, 2016.

Agilent's net revenue of $4,202 million in 2016 increased 4 percent when compared to 2015. Foreign currency movements for 2016 had an unfavorable impact of approximately 2 percentage points compared to 2015. Agilent's net revenue of $4,038 million was flat in 2015 when compared to 2014.

The life sciences and applied markets business brings together Agilent's analytical laboratory instrumentation and informatics. Revenue increased 1 percent in 2016 when compared to 2015. Foreign currency movements had an unfavorable impact of approximately 2 percentage points in 2016 when compared to 2015. For the year ended October 31, 2016 and excluding the impact of foreign currency movements, acquisitions and the NMR business our performance within the life sciences market continued to show strong revenue growth from the pharmaceutical and biotechnology markets. Within the applied markets, and excluding the impact of foreign currency movements and the NMR business, there was strong growth in both the environmental and food markets, but revenue from sales to other applied markets was weak with a decline in revenue from sales to the chemical and energy markets. Revenue decreased 2 percent in 2015 when compared to 2014. For the year ended October 31, 2015 and 

excluding the impact of currency movements and the NMR business, our performance within the life sciences business showed consistent revenue growth from sales to the pharmaceutical and biotechnology market partially offset by a decrease in the revenue generated from sales to the life sciences research market. Within applied markets and excluding the impact of currency movements and the NMR business, there was weakness in the chemical and energy markets in the year ended October 31, 2015 when compared to the prior year.

The diagnostics and genomics business includes genomics, nucleic acid contract manufacturing and the pathology, companion diagnostics and reagent partnership businesses. Revenue increased 7 percent in 2016 when compared to 2015. Foreign currency movements had an unfavorable impact of approximately 1 percentage points in 2016 when compared to 2015. Excluding the impact of foreign currency movements and acquisitions, growth in revenue from sales to the diagnostics and clinical markets continued to be strong, led by our companion diagnostics and genomics businesses in the year ended October 31, 2016 when compared to the prior year. Revenue was flat in 2015 when compared to 2014. Excluding foreign currency movements, our growth in revenue from sales to the diagnostics and clinical markets was strong in the year ended October 31, 2015 when compared to the prior year.

The Agilent CrossLab business combines our analytical laboratory services and consumables business. Revenue increased 7 percent in 2016 when compared to 2015. Foreign currency movements had an unfavorable impact of approximately 2 percentage points in 2016 when compared to 2015. Excluding the impact of foreign currency movements and acquisitions, there was growth in sales to all key markets. The pharmaceutical and biotechnology markets led all the markets in revenue and revenue growth along with very strong revenue growth from the food markets. In addition, we saw moderate growth from the environmental market and modest revenue growth from the chemical and energy markets. Revenue increased 2 percent in 2015 when compared to 2014. Excluding the impact of foreign currency movements there was growth in sales to all key end markets, in particular, the pharmaceutical and biotechnology market in the year ended October 31, 2015 when compared to the prior year. Within the applied markets revenue in chemical and energy end markets were slower but still reported growth when adjusted for currency movements.

Net income from continuing operations was $462 million in 2016 compared to net income from continuing operations of $438 million and $232 millionin 2015 and 2014, respectively. As of October 31, 2016 and 2015 we had cash and cash equivalents balances of $2,289 million and $2,003 million, respectively.

On November 22, 2013 we announced that our board of directors had authorized a share repurchase program. The existing program is designed to reduce or eliminate dilution resulting from issuance of stock under the company's employee equity incentive programs to target maintaining a weighted average share count of approximately 335 million diluted shares. For the years ended October 31, 2016, 2015 and 2014 we repurchased 2.4 million shares for $98 million, 6 million shares for $267 million and 4 million shares for $200 million, respectively. All such shares and related costs are held as treasury stock and accounted for using the cost method.

On May 28, 2015 we announced that our board of directors had approved a new share repurchase program (the "2015 repurchase program"). The 2015 share repurchase program authorizes the purchase of up to $1.14 billion of our common stock through and including November 1, 2018. The 2015 repurchase program does not require the company to acquire a specific number of shares and may be suspended or discontinued at any time. During the year ended October 31, 2016, upon the completion of our previous repurchase program, we repurchased approximately 8.3 million shares for $336 million under this authorization. All such shares and related costs are held as treasury stock and accounted for using the cost method.

For the years ended October 31, 2016, 2015 and 2014 cash dividends of $150 million, $133 million and $176 million were paid on the company's outstanding common stock, respectively. On November 16, 2016, we declared a quarterly dividend of $0.132 per share of common stock, or approximately $43 million which will be paid on January 25, 2017 to shareholders of record as of the close of business on January 3, 2017. The timing and amounts of any future dividends are subject to determination and approval by our board of directors.

Looking forward, we expect to continue to focus on the growth of the operating margin in our businesses by simplifying our operations, differentiating product solutions and improving our customer's experience. We anticipate returning a significant proportion of our cash flow to shareholders through our dividend and share repurchase programs. End market growth outlook in today's uncertain political and economic environment is unpredictable and challenging. However, we expect continued strength in the pharmaceutical markets and solid growth in the food and environmental markets but we remain uncertain about the growth in the chemical and energy markets. The unfavorable effects of changes in foreign currency exchange rates has decreased revenue by approximately 2 percentage points for the year ended October 31, 2016. Costs and expenses, incurred in local currency, were subject to the favorable effects due to changes in foreign currency exchange rates reducing our overall net exposure. The impact of foreign currency exchange rates movements can be positive or negative in any period and is calculated by applying the prior period foreign currency exchange rates to the current year period. We anticipate that changes in foreign currency exchange rates will continue to have an unfavorable impact on our performance for the near future.

[Source: Form 10-K dated 2016-12-20]

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COMPANY NEWS

▶ Agilent: Fiscal 3Q Earnings Snapshot   [04:18PM  Associated Press]
▶ One of Humana's major shareholders slashed its position by 70 percent   [02:44PM  American City Business Journals]
▶ Turkey Ruins Week for Dow, S&P   [Aug-13-18 09:15AM  Zacks]
▶ San Antonio oil and gas explorer invests in downtown Houston office   [Aug-09-18 03:21PM  American City Business Journals]
▶ Agilent Technologies Completes Acquisition of ProZyme   [Aug-01-18 04:05PM  Business Wire]
▶ Agilent Announces CFO Transition   [04:02PM  Business Wire]
▶ Agilent Receives Sustainability Leadership Award   [Jul-23-18 11:00AM  Business Wire]
▶ Defense program with Spirit AeroSystems ties on track for 2018 design milestone   [Jun-27-18 02:16PM  American City Business Journals]
▶ Agilent Opens New Logistics Hub in China   [11:00AM  Business Wire]
▶ Agilent Enables CISH on Dako Omnis   [11:00AM  Business Wire]
▶ Agilent Insources to Optimize Logistics Operations   [Jun-04-18 11:00AM  Business Wire]
▶ Agilent Demonstrates Innovation with Purpose at ASMS 2018   [Jun-01-18 11:00AM  Business Wire]
▶ Agilent Technologies to Acquire Assets of Ultra Scientific   [May-30-18 04:30PM  Business Wire]
▶ [$$] Charting the Market   [May-19-18 12:01AM  Barrons.com]
▶ Company News For May 16, 2018   [10:28AM  Zacks]
▶ Home Depot, Newmont Mining and D.R. Horton skid   [04:24PM  Associated Press]
▶ After-hours buzz: SWCH, SYMC, A & more   [May-14-18 05:53PM  CNBC]
▶ Agilent stock falls after earnings   [04:19PM  MarketWatch]
▶ Agilent: Fiscal 2Q Earnings Snapshot   [04:13PM  Associated Press]
▶ Agilent Completes Acquisition of Genohm   [08:45AM  Business Wire]
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