NEW YORK – Agilent Technologies reported after the close of the market Tuesday that its fiscal second quarter revenues were up 7 percent year over year while revenues from its Diagnostics and Genomics Group grew 1 percent. The firm also lowered its guidance for 2023 due to weak instrument demand.
The Santa Clara, California-based firm said its revenues for the quarter were $1.72 billion compared to $1.61 billion one year earlier, beating the Wall Street consensus estimate of $1.67 billion.
Agilent CEO Mike McMullen said in a conference call to discuss the financial results that customers worldwide, particularly pharmaceutical market customers in the US and China, are increasingly cautious about capital expenses amid macroeconomic uncertainty and stresses in the banking system. Early-stage biotech customers, too, have cut purchases due to funding and liquidity challenges, although he noted that they only account for a small portion of the company's revenues.
"Outside of these early-stage biotechs, the order funnel continues to be healthy but it is taking a longer time for orders to be approved, slowing deal velocity and generation of new orders," he said. "We expect this constrained capital environment to remain in place throughout the course of our fiscal year."
The company's Diagnostics and Genomics Group posted revenues of $362 million, up 1 percent from $358 million in Q2 2022, with growth in its pathology, companion diagnostics, and nucleic acid solutions divisions that was muted by a challenging market for genomic testing,McMullen said. The expansion of Agilent's nucleic acid solutions division remains on track to come online during Q3, he said, and construction has already begun on the next phase of the expansion.
The firm noted that it launched a next-generation sequencing assay for comprehensive genomic profiling of solid tumors in the quarter, the SureSelect Cancer CGP Assay, which includes 679 genes.
Revenues from its Life Sciences and Applied Markets Group rose 8 percent to $968 million from $896 million, and Agilent CrossLab Group revenues were up 10 percent to $387 million from $353 million.
Agilent reported Q2 net income of $302 million, or $1.02 per share, compared to net income of $274 million, or $.91 per share, in the year-ago quarter. Adjusted EPS was $1.27 per share, just beating the consensus Wall Street estimate of $1.26 per share.
The firm also raised its R&D spending to $126 million in Q2, up about 10 percent from $115 million a year earlier. SG&A expenses rose almost 8 percent to $415 million from $386 million.
Agilent ended the quarter with $1.18 billion in cash and cash equivalents.
For Q3, Agilent expects revenues between $1.64 billion and $1.68 billion and adjusted EPS between $1.36 and $1.38.
Due to "increased market uncertainties," the firm lowered its full-year revenue guidance to a range of $6.93 billion to $7.03 billion, down from prior guidance of $7.03 billion to $7.10 billion. Full-year adjusted EPS is now estimated to be $5.60 to $5.65, down from a prior estimate of $5.65 to $5.70.
Agilent's share price plunged 11 percent, to $114.19, in Wednesday morning trading on the New York Stock Exchange.