Tags: Agilent | sets | expectations | A

Agilent Carefully Sets Wall Street Expectations

By    |   Tuesday, 07 February 2012 09:27 AM

Agilent Technologies (A) is a profitable company that provides analysis and measurement equipment to companies in several sectors. Investors may want to take a closer look how this company measures its own, steady growth and, in particular, how carefully it sets expectations among investors and Wall Street analysts.

Agilent divides its business into three divisions: The Electronic Measurements Group produces about half of revenues and has the highest operating margin. The Life Sciences Group generates 27 percent of revenue and has the lowest margin percentage.

The Chemical Analysis Group is responsible for the remaining sales and has an operating margin percentage slightly below the Electronics group. Sales are evenly divided between North America, Europe and Asia Pacific.

Approximately 60 percent of revenue is from the sale of analytical equipment. The balance is revenue from the sales of consumables and services.

The Agilent Technologies 2011 fiscal year ended on Oct. 31. For the year, the company reported revenue of $6.62 billion, up 22 percent from $5.44 billion a year earlier.

Non-GAAP earnings for the year were $2.95 per share, up 47 percent from the $2 earned in 2010.

Projected growth

Management's guidance for the company's 2012 fiscal year results are revenue of $6.85 billion to $7.15 billion and earnings between $3 and $3.35 per share.

However, Agilent management seems to make a practice of giving slightly low guidance and then beating the Wall Street estimates, which mirror the guidance.

The 2011 guidance provided at the end of the 2010 fiscal year was significantly lower than the results actually produced. Agilent Technologies has made a significant turnaround from 2009, when the company saw a 20 percent drop in sales and posted a net loss.

In January, Agilent's board of directors approved the company’s first-ever quarterly dividend of 10 cents per share. The distribution will be paid to holders of record on April 3. Initiating a dividend indicates management belief in the future profitability of the company.

Recently the analysts at UBS reiterated their buy rating on Agilent Technologies and increased the target price by $4 per share.

The company reports next on Feb. 15.

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Tuesday, 07 February 2012 09:27 AM
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