NEW YORK – Agilent Technologies reported after the close of the market on Wednesday that its fiscal first quarter diagnostics and life sciences revenues rose 4 percent year over year.
For the three months ended Jan. 31, the Santa Clara, California-based firm said that its overall fiscal Q1 revenues increased by about 1 percent to $1.68 billion from $1.66 billion a year earlier, beating Wall Street's consensus estimate of $1.67 billion.
The results are the first reported by Agilent following a restructuring that was implemented after Padraig McDonnell took the reins as CEO last year. The firm said in November that it was merging its diagnostics and life sciences businesses into a new Life Sciences and Diagnostics Markets Group (LDG) that is focused on the pharma, biopharma, clinical, and diagnostics end markets. That segment provides about 38 percent of the company's annual revenues, or about $2.5 billion.
On a call following the release of the financial results, company officials said it is removing layers of management and cutting costs as part of its three-year transformation program aimed to help the firm deliver revenue growth, margin expansion, and double-digit increases in earnings per share.
The firm announced the launch of the transformation program late last year, and McDonnell said that the company has recently created a strategic pricing operation and invested in its digital commerce capabilities while the firm's procurement teams have been identifying cost-savings opportunities across various company functions.
For fiscal Q1 the Santa Clara, California-based firm's LDG revenues rose to $647 million from $620 million with high single-digit growth in the firm's liquid chromatography and liquid chromatography/mass spectrometry instruments following the launch in October of the company's Infinity III LC platform.
The increase in total revenues was led by growth in perfluoroalkyl and polyfluoroalkyl substances (PFAS) environmental testing, which rose 70 percent during the quarter. McDonnell also noted that the firm received an "outsized share" of stimulus funding in China, and he said that the firm exceeded expectations in all its end markets except for academia and government.
During the recently completed quarter, that segment gained the EU's In Vitro Diagnostic Regulation certification for its PD-L1 IHC 28-8 PharmDx companion diagnostic test to aid treatment decisions for cancer therapies with anti-PD-1 antibodies. The firm also inked a comarketing deal with Cambridge, UK-based biomarker discovery and diagnostics firm Tagomics for the integration of Tagomics' Interlace epigenetic profiling platform with Agilent's SureSelect library preparation and target enrichment products and cancer panels.
The company said that it had 7 percent growth in its diagnostics and clinical end market businesses with strong results in the Americas and Europe.
Simon May, LDG president, said on the call that the firm continued to gain traction for its Magnis automated next-generation sequencing library preparation system, and it had strong customer adoption for its Avida Biomed genomics tools, although those gains were more than offset by a 7 percent decline in revenues from customers in academia and government.
The company attributed the decline in that market, Agilent's smallest, to global softness in demand as well as lower spending among US customers in anticipation of cuts to US government spending.
McDonnell also said that the LDG segment has been focused on the integration of the Biovectra contract development and manufacturing firm that Agilent had acquired last year in a $925 million deal to bolster Agilent's capabilities for biopharma customers.
As for other segments, Agilent CrossLab Group revenues increased 1 percent to $696 million from $686 million. That group remains focused on supporting customers in end markets through software, informatics, automation, and consumables services.
Meanwhile, the firm's Applied Markets Group revenues fell 4 percent year over year to $338 million from $352 million. That group is focused on the company's food, environmental, forensics, chemicals, and advanced materials markets.
Agilent reported net income for Q1 2025 of $318 million, or $1.11 per share, compared to $348 million, or $1.18 per share, in Q1 2024. The firm reported non-GAAP EPS of $1.31 per share, beating analysts' consensus estimate of $1.27.
The firm cut its R&D spending by 12 percent to $113 million from $128 million a year earlier while it increased its SG&A spending by 4 percent to $410 million from $396 million.
Agilent ended the quarter with $1.47 billion in cash and cash equivalents.
Addressing potential headwinds tied to the recent threat of tariffs by the Trump administration, McDonnell said that the company has a diversified supply chain with manufacturing operations in all major global regions, and the firm has been working to mitigate any effects on the business. As for potential cuts by the administration to National Institutes of Health funding for research, he said that about 1 percent of the company's revenue relates to NIH-funded programs.
For the second quarter of fiscal year 2025, Agilent expects revenues in the range of $1.61 billion to $1.65 billion. Non-GAAP EPS is expected to be in the range of $1.25 to $1.28 per share.
For the full fiscal year 2025, Agilent now expects that its revenues will rise 3 to 4 percent year over year to $6.68 billion to $6.76 billion, down from a prediction in November that revenues would rise 4 percent to 6 percent to the range of $6.79 billion to $6.87 billion. However, the firm maintained its expectations that non-GAAP EPS for the year will be in the range of $5.54 to $5.61 per share.
In morning trading Thursday, shares of Agilent on the New York Stock Exchange were down 4 percent to $129.60.