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Agilent Technologies Reports Fourth-Quarter Fiscal Year 2018 Financial Results

November 19, 2018

SANTA CLARA, Calif.--(BUSINESS WIRE)--Nov 19, 2018--Agilent Technologies, Inc. (NYSE: A) today reported revenue of $1.29 billion for the fourth-quarter ended October 31, 2018, up 9 percent year over year (up 9 percent on a core basis (1) ).

Fourth-quarter GAAP net income was $195 million, or $0.61 per share. Last year’s fourth-quarter GAAP net income was $177 million, or $0.54 per share.

“The Agilent team delivered an outstanding quarter to wrap up the fiscal year with revenues and earnings per share ahead of expectations,” said Mike McMullen, Agilent CEO and President. “Our performance this quarter caps off an excellent 2018 as we achieved our highest annual core growth rate and profitability since becoming a stand-alone life sciences company in 2014.”

“During the quarter we continued our investment in growth introducing new and differentiated products and services,” continued McMullen. “We leveraged our strong balance sheet completing several acquisitions to further strengthen our portfolio. We also returned over $600 million to shareholders through stock buybacks and dividends this year.

“We enter fiscal 2019 with momentum. Our focus remains on executing our shareholder value creation model to deliver superior earnings growth.”

Financial Highlights

Life Sciences and Applied Markets Group

Fourth-quarter revenue of $597 million from Agilent’s Life Sciences and Applied Markets Group (LSAG) grew 8 percent year over year (up 9 percent on a core basis (1) ), with broad-based strength across major end markets, platforms and regions. LSAG’s operating margin for the quarter was 25.9 percent. Full-year revenue of $2.3 billion grew 9 percent year over year (up 7 percent on a core basis (1) ). LSAG’s operating margin for the year was 24.1 percent.

Agilent CrossLab Group

Fourth-quarter revenue of $441 million from Agilent CrossLab Group (ACG) grew 9 percent year over year (up 9 percent on a core basis (1) ). Demand was excellent across both services and consumables. ACG’s operating margin for the quarter was 24.7 percent. Full-year revenue of $1.7 billion grew 11 percent year over year (up 8 percent on a core basis (1) ). ACG’s operating margin for the year was 23.3 percent.

Diagnostics and Genomics Group

Fourth-quarter revenue of $256 million from Agilent’s Diagnostics and Genomics Group (DGG) grew 9 percent year over year (up 5 percent on a core basis (1) ) led by pharma growth and strong demand for genomics and NASD products. DGG’s operating margin for the quarter was 23.3 percent. Full-year revenue of $943 million grew 10 percent year over year (up 5 percent on a core basis (1) ). DGG’s operating margin for the year was 18.9 percent.

2019 First Quarter and Full Year Outlook

For fiscal year 2019, Agilent expects revenue of $5.13 billion to $5.17 billion, representing growth of 4.4 to 5.2 percent and core growth of 5.0 to 5.5 percent (1). Full-year 2019 non-GAAP earnings of $3.00 to $3.05 per share (3). The guidance is based on October 31, 2018 currency exchange rates.

Agilent expects first-quarter 2019 revenue in the range of $1.265 billion to $1.280 billion, representing growth of 4.4 to 5.7 percent and core revenue growth of 4.5 to 5.5 percent (1). First-quarter 2019 non-GAAP earnings are expected to be in the range of $0.71 to $0.73 per share (3).

New Share Repurchase Program

Agilent’s Board of Directors approved a new share repurchase program authorizing the purchase of up to $1.75 billion of common stock. The 2018 share repurchase program commences on November 21, 2018, replacing the previous program.

The number of shares to be repurchased and the timing of any repurchases will depend on factors such as the share price, economic and market conditions, and corporate and regulatory requirements. The share repurchase program may be suspended, amended or discontinued at any time.

Conference Call

Agilent’s management will present more details about its fourth-quarter FY2018 financial results on a conference call with investors today at 1:30 p.m. (Pacific Time). This event will be webcast live in listen-only mode. Listeners may log on at www.investor.agilent.com and select “Q4 2018 Agilent Technologies Inc. Earnings Conference Call” in the “News & Events Calendar of Events” section. The webcast will remain available on the company’s website for 90 days.

Additional information regarding financial results can be found at www.investor.agilent.com by selecting “Financial Results” in the “Financial Information” section.

In addition, a telephone replay of the conference call will be available at approximately November 19, 2018 at 4:30 p.m. (Pacific Time) after the call and through November 26 by dialing +1 855-859-2056 (or +1 404-537-3406 from outside the United States) and entering pass code 6519506.

About Agilent Technologies

Agilent Technologies Inc. (NYSE: A) is a global leader in life sciences, diagnostics and applied chemical markets. With more than 50 years of insight and innovation, Agilent instruments, software, services, solutions and people provide trusted answers to its customers’ most challenging questions. The company generated revenues of $4.91 billion in fiscal 2018 and employs 14,500 people worldwide. Information about Agilent is available at www.agilent.com.

Forward-Looking Statements

This news release contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The forward-looking statements contained herein include, but are not limited to, information regarding Agilent’s future revenue, earnings and profitability; planned new products; market trends; the future demand for the company’s products and services; customer expectations; information regarding the company’s share repurchase programs, and revenue and non-GAAP earnings guidance for the first quarter and full fiscal year 2019. These forward-looking statements involve risks and uncertainties that could cause Agilent’s results to differ materially from management’s current expectations. Such risks and uncertainties include, but are not limited to, unforeseen changes in the strength of our customers’ businesses; unforeseen changes in the demand for current and new products, technologies, and services; unforeseen changes in the currency markets; customer purchasing decisions and timing, and the risk that we are not able to realize the savings expected from integration and restructuring activities. In addition, other risks that Agilent faces in running its operations include the ability to execute successfully through business cycles; the ability to meet and achieve the benefits of its cost-reduction goals and otherwise successfully adapt its cost structures to continuing changes in business conditions; ongoing competitive, pricing and gross-margin pressures; the risk that our cost-cutting initiatives will impair our ability to develop products and remain competitive and to operate effectively; the impact of geopolitical uncertainties and global economic conditions on our operations, our markets and our ability to conduct business; the ability to improve asset performance to adapt to changes in demand; the ability of our supply chain to adapt to changes in demand; the ability to successfully introduce new products at the right time, price and mix; the ability of Agilent to successfully integrate recent acquisitions; the ability of Agilent to successfully comply with certain complex regulations; and other risks detailed in Agilent’s filings with the Securities and Exchange Commission, including our quarterly report on Form 10-Q for the fiscal quarter ended July 31, 2018. Forward-looking statements are based on the beliefs and assumptions of Agilent’s management and on currently available information. Agilent undertakes no responsibility to publicly update or revise any forward-looking statement.

(1) Core revenue growth excludes the impact of currency and acquisitions and divestitures within the past 12 months. Core revenue is a non-GAAP measure. A reconciliation between Q4 FY18 and full fiscal year 2018 GAAP revenue and core revenue is set forth on pages 6 and 7 of the attached tables along with additional information regarding the use of this non-GAAP measure. Core revenue growth rate as projected for Q1 FY19 and full fiscal year 2019 excludes the impact of currency, acquisitions and divestitures within the past 12 months. Most of the excluded amounts pertain to events that have not yet occurred and are not currently possible to estimate with a reasonable degree of accuracy and could differ materially. Therefore, no reconciliation to GAAP amounts has been provided for the projection.

(2) Non-GAAP net income and non-GAAP earnings per share primarily exclude the impacts of non-cash asset impairments and intangibles amortization, business exit and divestiture costs, transformational initiatives, acquisition and integration costs, pension settlement gain, gain on step acquisition of Lasergen, Nucleic Acid Solutions Division (“NASD”) site costs and special compliance costs. We also exclude any tax benefits or expenses that are not directly related to ongoing operations and which are either isolated or are not expected to occur again with any regularity or predictability. A reconciliation between non-GAAP net income and GAAP net income is set forth on page 4 of the attached tables along with additional information regarding the use of this non-GAAP measure.

(3) Non-GAAP earnings per share as projected for Q1 FY19 and full fiscal year 2019 excludes primarily the impacts of non-cash asset impairments and intangibles amortization, business exit and divestiture costs, transformational initiatives, acquisition and integration costs, pension settlement gain, Nucleic Acid Solutions Division (“NASD”) site costs and special compliance costs. We also exclude any tax benefits that are not directly related to ongoing operations and which are either isolated or are not expected to occur again with any regularity or predictability, including the impact of U.S. Tax Cuts and Jobs Act (Tax Reform). Most of these excluded amounts that pertain to events that have not yet occurred and are not currently possible to estimate with a reasonable degree of accuracy and could differ materially. Therefore, no reconciliation to GAAP amounts has been provided. Future amortization of intangibles is expected to be approximately $26 million per quarter.

NOTE TO EDITORS: Further technology, corporate citizenship and executive news is available on the Agilent news site at www.agilent.com/go/news.

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