Intrinsic value of Agilent Technologies - A

Previous Close

$73.44

  Intrinsic Value

$82.94

stock screener

  Rating & Target

hold

+13%

Previous close

$73.44

 
Intrinsic value

$82.94

 
Up/down potential

+13%

 
Rating

hold

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   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, %
  6.43
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
  6.06
  5.96
  5.86
  5.77
  5.70
  5.63
  5.56
  5.51
  5.46
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
  5.20
  5.18
  5.16
  5.14
  5.13
  5.12
  5.10
  5.09
Revenue, $m
  4,472
  4,785
  5,110
  5,449
  5,801
  6,167
  6,548
  6,945
  7,359
  7,790
  8,240
  8,709
  9,199
  9,711
  10,246
  10,805
  11,390
  12,002
  12,642
  13,312
  14,014
  14,748
  15,518
  16,324
  17,170
  18,055
  18,984
  19,958
  20,979
  22,050
  23,173
Variable operating expenses, $m
 
  800
  837
  875
  914
  956
  999
  1,043
  1,090
  1,139
  1,189
  982
  1,037
  1,094
  1,155
  1,218
  1,284
  1,353
  1,425
  1,500
  1,579
  1,662
  1,749
  1,840
  1,935
  2,035
  2,140
  2,249
  2,364
  2,485
  2,612
Fixed operating expenses, $m
 
  3,016
  3,091
  3,168
  3,247
  3,329
  3,412
  3,497
  3,585
  3,674
  3,766
  3,860
  3,957
  4,056
  4,157
  4,261
  4,367
  4,477
  4,589
  4,703
  4,821
  4,941
  5,065
  5,191
  5,321
  5,454
  5,591
  5,730
  5,874
  6,021
  6,171
Total operating expenses, $m
  3,631
  3,816
  3,928
  4,043
  4,161
  4,285
  4,411
  4,540
  4,675
  4,813
  4,955
  4,842
  4,994
  5,150
  5,312
  5,479
  5,651
  5,830
  6,014
  6,203
  6,400
  6,603
  6,814
  7,031
  7,256
  7,489
  7,731
  7,979
  8,238
  8,506
  8,783
Operating income, $m
  841
  969
  1,183
  1,406
  1,639
  1,882
  2,137
  2,404
  2,684
  2,977
  3,284
  3,867
  4,206
  4,561
  4,934
  5,327
  5,739
  6,173
  6,629
  7,108
  7,613
  8,145
  8,704
  9,293
  9,913
  10,566
  11,254
  11,978
  12,741
  13,544
  14,390
EBITDA, $m
  1,053
  1,298
  1,516
  1,743
  1,981
  2,230
  2,491
  2,763
  3,049
  3,348
  3,661
  3,991
  4,336
  4,698
  5,079
  5,479
  5,900
  6,342
  6,807
  7,297
  7,811
  8,353
  8,923
  9,524
  10,156
  10,821
  11,522
  12,260
  13,037
  13,856
  14,718
Interest expense (income), $m
  82
  76
  86
  96
  107
  118
  130
  142
  154
  167
  181
  195
  210
  226
  242
  259
  277
  296
  315
  335
  357
  379
  402
  427
  453
  479
  508
  537
  568
  601
  635
Earnings before tax, $m
  803
  894
  1,097
  1,310
  1,532
  1,765
  2,008
  2,263
  2,530
  2,810
  3,103
  3,672
  3,995
  4,335
  4,692
  5,067
  5,462
  5,877
  6,314
  6,773
  7,257
  7,766
  8,302
  8,866
  9,461
  10,087
  10,746
  11,441
  12,173
  12,944
  13,756
Tax expense, $m
  119
  241
  296
  354
  414
  476
  542
  611
  683
  759
  838
  991
  1,079
  1,170
  1,267
  1,368
  1,475
  1,587
  1,705
  1,829
  1,959
  2,097
  2,241
  2,394
  2,554
  2,723
  2,902
  3,089
  3,287
  3,495
  3,714
Net income, $m
  684
  653
  801
  956
  1,118
  1,288
  1,466
  1,652
  1,847
  2,051
  2,265
  2,681
  2,917
  3,165
  3,425
  3,699
  3,987
  4,290
  4,609
  4,944
  5,297
  5,669
  6,060
  6,472
  6,906
  7,363
  7,845
  8,352
  8,886
  9,449
  10,042

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,678
  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
  8,426
  6,150
  6,569
  7,004
  7,456
  7,926
  8,416
  8,927
  9,458
  10,013
  10,591
  11,194
  11,824
  12,482
  13,170
  13,889
  14,640
  15,427
  16,249
  17,111
  18,012
  18,957
  19,946
  20,983
  22,069
  23,208
  24,401
  25,653
  26,965
  28,342
  29,786
Adjusted assets (=assets-cash), $m
  5,748
  6,150
  6,569
  7,004
  7,456
  7,926
  8,416
  8,927
  9,458
  10,013
  10,591
  11,194
  11,824
  12,482
  13,170
  13,889
  14,640
  15,427
  16,249
  17,111
  18,012
  18,957
  19,946
  20,983
  22,069
  23,208
  24,401
  25,653
  26,965
  28,342
  29,786
Revenue / Adjusted assets
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
  0.778
Average production assets, $m
  1,087
  1,163
  1,242
  1,324
  1,410
  1,499
  1,591
  1,688
  1,788
  1,893
  2,002
  2,116
  2,235
  2,360
  2,490
  2,626
  2,768
  2,916
  3,072
  3,235
  3,405
  3,584
  3,771
  3,967
  4,172
  4,387
  4,613
  4,850
  5,098
  5,358
  5,631
Working capital, $m
  2,906
  469
  501
  534
  568
  604
  642
  681
  721
  763
  807
  853
  902
  952
  1,004
  1,059
  1,116
  1,176
  1,239
  1,305
  1,373
  1,445
  1,521
  1,600
  1,683
  1,769
  1,860
  1,956
  2,056
  2,161
  2,271
Total debt, $m
  2,011
  2,039
  2,285
  2,541
  2,807
  3,085
  3,373
  3,674
  3,987
  4,313
  4,654
  5,009
  5,381
  5,768
  6,173
  6,596
  7,039
  7,502
  7,987
  8,494
  9,025
  9,581
  10,164
  10,775
  11,415
  12,085
  12,788
  13,526
  14,299
  15,109
  15,960
Total liabilities, $m
  3,595
  3,623
  3,869
  4,125
  4,391
  4,669
  4,957
  5,258
  5,571
  5,897
  6,238
  6,593
  6,965
  7,352
  7,757
  8,180
  8,623
  9,086
  9,571
  10,078
  10,609
  11,165
  11,748
  12,359
  12,999
  13,669
  14,372
  15,110
  15,883
  16,693
  17,544
Total equity, $m
  4,831
  2,528
  2,700
  2,878
  3,064
  3,258
  3,459
  3,669
  3,887
  4,115
  4,353
  4,601
  4,860
  5,130
  5,413
  5,708
  6,017
  6,340
  6,678
  7,032
  7,403
  7,791
  8,198
  8,624
  9,070
  9,538
  10,029
  10,543
  11,083
  11,649
  12,242
Total liabilities and equity, $m
  8,426
  6,151
  6,569
  7,003
  7,455
  7,927
  8,416
  8,927
  9,458
  10,012
  10,591
  11,194
  11,825
  12,482
  13,170
  13,888
  14,640
  15,426
  16,249
  17,110
  18,012
  18,956
  19,946
  20,983
  22,069
  23,207
  24,401
  25,653
  26,966
  28,342
  29,786
Debt-to-equity ratio
  0.416
  0.810
  0.850
  0.880
  0.920
  0.950
  0.980
  1.000
  1.030
  1.050
  1.070
  1.090
  1.110
  1.120
  1.140
  1.160
  1.170
  1.180
  1.200
  1.210
  1.220
  1.230
  1.240
  1.250
  1.260
  1.270
  1.280
  1.280
  1.290
  1.300
  1.300
Adjusted equity ratio
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  684
  653
  801
  956
  1,118
  1,288
  1,466
  1,652
  1,847
  2,051
  2,265
  2,681
  2,917
  3,165
  3,425
  3,699
  3,987
  4,290
  4,609
  4,944
  5,297
  5,669
  6,060
  6,472
  6,906
  7,363
  7,845
  8,352
  8,886
  9,449
  10,042
Depreciation, amort., depletion, $m
  212
  328
  333
  338
  343
  348
  353
  359
  365
  371
  377
  123
  130
  137
  145
  153
  161
  170
  179
  188
  198
  208
  219
  231
  243
  255
  268
  282
  296
  312
  327
Funds from operations, $m
  689
  981
  1,134
  1,294
  1,461
  1,636
  1,819
  2,011
  2,211
  2,422
  2,642
  2,804
  3,047
  3,302
  3,570
  3,852
  4,148
  4,460
  4,787
  5,132
  5,495
  5,877
  6,280
  6,703
  7,149
  7,618
  8,113
  8,634
  9,183
  9,760
  10,369
Change in working capital, $m
  -200
  31
  32
  33
  34
  36
  37
  39
  41
  42
  44
  46
  48
  50
  52
  55
  57
  60
  63
  66
  69
  72
  75
  79
  83
  87
  91
  95
  100
  105
  110
Cash from operations, $m
  889
  950
  1,102
  1,261
  1,427
  1,600
  1,782
  1,972
  2,171
  2,380
  2,598
  2,758
  2,999
  3,252
  3,518
  3,797
  4,091
  4,400
  4,725
  5,067
  5,427
  5,805
  6,204
  6,624
  7,066
  7,532
  8,022
  8,539
  9,083
  9,656
  10,259
Maintenance CAPEX, $m
  0
  -63
  -68
  -72
  -77
  -82
  -87
  -93
  -98
  -104
  -110
  -116
  -123
  -130
  -137
  -145
  -153
  -161
  -170
  -179
  -188
  -198
  -208
  -219
  -231
  -243
  -255
  -268
  -282
  -296
  -312
New CAPEX, $m
  -176
  -76
  -79
  -82
  -86
  -89
  -93
  -96
  -101
  -105
  -109
  -114
  -119
  -124
  -130
  -136
  -142
  -149
  -156
  -163
  -170
  -179
  -187
  -196
  -205
  -215
  -226
  -237
  -248
  -260
  -273
Cash from investing activities, $m
  -305
  -139
  -147
  -154
  -163
  -171
  -180
  -189
  -199
  -209
  -219
  -230
  -242
  -254
  -267
  -281
  -295
  -310
  -326
  -342
  -358
  -377
  -395
  -415
  -436
  -458
  -481
  -505
  -530
  -556
  -585
Free cash flow, $m
  584
  811
  955
  1,106
  1,264
  1,429
  1,602
  1,783
  1,972
  2,171
  2,379
  2,527
  2,756
  2,997
  3,250
  3,516
  3,796
  4,090
  4,400
  4,725
  5,068
  5,429
  5,809
  6,209
  6,630
  7,074
  7,541
  8,034
  8,552
  9,099
  9,675
Issuance/(repayment) of debt, $m
  110
  238
  246
  256
  266
  277
  289
  301
  313
  327
  341
  355
  371
  388
  405
  423
  443
  463
  485
  507
  531
  556
  583
  611
  640
  671
  703
  737
  773
  811
  850
Issuance/(repurchase) of shares, $m
  -128
  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  
  -32
  238
  246
  256
  266
  277
  289
  301
  313
  327
  341
  355
  371
  388
  405
  423
  443
  463
  485
  507
  531
  556
  583
  611
  640
  671
  703
  737
  773
  811
  850
Total cash flow (excl. dividends), $m
  559
  1,048
  1,202
  1,362
  1,530
  1,706
  1,890
  2,083
  2,285
  2,497
  2,720
  2,883
  3,128
  3,385
  3,655
  3,940
  4,239
  4,553
  4,884
  5,233
  5,599
  5,985
  6,391
  6,819
  7,270
  7,745
  8,244
  8,771
  9,325
  9,910
  10,525
Retained Cash Flow (-), $m
  -588
  -165
  -172
  -179
  -186
  -193
  -201
  -210
  -219
  -228
  -238
  -248
  -259
  -270
  -283
  -295
  -309
  -323
  -338
  -354
  -371
  -388
  -407
  -426
  -446
  -468
  -491
  -514
  -539
  -566
  -593
Prev. year cash balance distribution, $m
 
  2,468
  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
 
  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 available for distribution, $m
 
  3,351
  1,030
  1,184
  1,345
  1,513
  1,689
  1,874
  2,067
  2,269
  2,482
  2,635
  2,869
  3,114
  3,373
  3,644
  3,930
  4,230
  4,546
  4,879
  5,229
  5,597
  5,985
  6,393
  6,823
  7,277
  7,754
  8,256
  8,786
  9,344
  9,932
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
 
  3,213
  943
  1,030
  1,107
  1,173
  1,226
  1,266
  1,292
  1,304
  1,301
  1,251
  1,224
  1,184
  1,132
  1,070
  999
  920
  837
  751
  664
  579
  497
  419
  348
  283
  226
  177
  136
  102
  75
Current shareholders' claim on cash, %
  100
  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 34.6
Price to Sales 5.3
Price to Book 4.9
Price to Tangible Book
Price to Cash Flow 26.6
Price to Free Cash Flow 33.2
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 7% 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 $2942 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 4.2% 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 0%.

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 24.3%.

Life of production assets of 17.2 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 9.8%. 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 324.175 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 $23.8 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

▶ Downstream energy company names new president, CEO   [Jan-22-18 01:25PM  American City Business Journals]
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▶ Agilent beats Street 4Q forecasts   [04:27PM  Associated Press]
▶ Agilent drops on weak earnings guidance   [04:16PM  CNBC Videos]
▶ Stay focused on individual companies   [Nov-17-17 08:34PM  CNBC Videos]
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