NEW YORK – Agilent Technologies lowered its full-year guidance on Wednesday and reported that its second quarter revenues dropped more than 8 percent year over year on conservative capital equipment spending and soft markets for the firm's cell analysis, next-generation sequencing chemistries, and nucleic acid solutions division, among other factors.
The Santa Clara, California-based firm said that it expects that full-year revenues will be down 6.0 percent to 4.9 percent year over year from prior guidance that revenues would be down 1.8 percent to 0.3 percent.
Full-year fiscal 2024 revenues are now expected to be in the range of $6.42 billion to $6.50 billion, down from a previous expectation of revenues in the range of $6.71 billion to $6.81 billion. Meanwhile, non-GAAP EPS is expected to be in the range of $5.15 to $5.25, which is down from a previously predicted range of $5.44 to $5.55.
For the three months ended April 30, the company reported Q2 revenues of $1.57 billion compared to $1.72 billion in the year-ago quarter, falling short of analysts' consensus estimate of $1.58 billion. It reported that revenues were down 7 percent year over year on a core basis, excluding the impacts of currency fluctuations, acquisitions, and divestitures.
Agilent President and CEO Padraig McDonnell said in a statement that the firm delivered on expectations and showed the diversity of its diversified business.
"While we see the market improving, it is improving at a slower pace than anticipated," he said. "We are taking decisive action to streamline our cost structure and capture incremental opportunities in the markets as they recover."
McDonnel noted in a conference call that the company is seeing early signs of market recovery and that the firm has implemented cost-cutting measures with a goal of delivering by the end of the fiscal year annual savings of $100 million. He said that the firm has sharpened its focus on growth vectors including biopharma, per- and polyfluoroalkyl substances testing, and advanced materials "while also investing in our digital ecosystem and accelerating our innovation to drive even faster execution."
Agilent officials said early this year that they expected 2024 to be a recovery year with lower growth than the firm's predicted long-term average of 5 percent to 7 percent.
The firm's Diagnostics and Genomics Group revenues were down 9 percent in Q2 to $417 million compared to $456 million a year earlier. Company officials said that cell analysis revenues declined due to constrained spending on instruments even as the firm recently introduced its Agilent Spectral Flow Cytometer. It also said that softness in revenues from NGS chemistries as well as a low-teens decline in the nucleic acid solutions business contributed to the decline in revenues, although it also said that its pathology business delivered mid-single-digit growth due to strong demand for cancer diagnostics.
The firm's Life Sciences and Applied Markets Group revenues declined 14 percent to $754 million compared to $874 million in fiscal Q2 2023. The company said that conservative capital equipment spending was partly offset by growth in revenues from consumables and used instruments.
The firm's CrossLab Group revenues rose 4 percent to $402 million compared to $387 million a year ago with high-single-digit growth outside of China and double-digit contract revenue growth.
Agilent CFO Robert McMahon said on the conference call that the firm saw overall revenue declines of 21 percent in China, 5 percent in the Americas, and 3 percent in Europe. The Asia-Pacific region, excluding China, was also down slightly.
He said that the firm expects to see improvement in the second half of the year.
Agilent reported net income for the quarter of $308 million, or $1.05 per share, compared to $302 million, or $1.02 per share, a year ago. The firm also reported non-GAAP EPS of $1.22, which beat the analysts' consensus estimate of $1.19 per share.
The firm lowered its R&D spending by 12 percent, to $113 million from $126 million one year ago, and it lowered its SG&A spending 8 percent, to $380 million from $415 million.
The firm ended the quarter with $1.67 billion in cash and cash equivalents.
Agilent expects revenues of $1.54 billion to $1.58 billion in the fiscal third quarter. Non-GAAP EPS is estimated to be in the range of $1.25 to $1.28.
Agilent's share price fell 10 percent, to $130.57, in early morning trading Thursday on the New York Stock Exchange.