Agilent Technologies 3rd-quarter profit down 26 percent
Published: Wednesday, August 15, 2012 at 3:16 p.m.
Last Modified: Wednesday, August 15, 2012 at 6:46 p.m.
Agilent Technologies, the largest high-tech employer in Sonoma County, saw its profits fall 26 percent in its third quarter compared to a year ago, the company said Wednesday.
A slowdown in manufacturing in China and problems in Europe’s economy contributed to the drop.
“While we’re not seeing outright order cancellations, we are seeing all the classic signs of a slowdown,” Agilent CEO Bill Sullivan said Wednesday in a conference call with investors. “Deals are taking longer to close, and customers are delaying shipments. We felt the full effect of this phenomenon in July.”
Net revenues rose to $1.72 billion during the quarter that ended July 31, up 2 percent from a year ago. But profits fell to $243 million, or 69 cents per diluted share, down from $330 million, or 92 cents per diluted share, in the third quarter last year. At the same time, orders slipped 1 percent.
“Our orders and revenues were below expectations,” said Didier Hirsch, senior vice president and chief financial officer.
Core orders grew 8 percent in the Americas, but fell 5 percent in Europe, 10 percent in Japan, and 6 percent in the rest of Asia, Hirsch said.
That performance fell short of Wall Street estimates, and the company’s stock price fell 8 percent to $37.41 in after-hours trading.
Agilent has about 1,150 workers in Santa Rosa, primarily in its electronic measurement division. Sales in that division were down 1 percent compared to last year, and orders declined 4 percent.
Revenue in the communications sector grew 7 percent, driven by the popularity of smartphones. But that was offset by weaker demand in the aerospace and defense sectors, which fell 11 percent, and the industrial segment, which fell 10 percent.
“Even in a tough environment, which is what you have seen, the overall electronic sector is still having a lot of growth,” said Guy Séné, senior vice president and president of the electronic measurement group.
The Santa Rosa office has released several new products in the last few months, including a new mobile phone test set and an adaptor to test multiple phones, he said. The local office will remain focused on innovation, and staffing levels will remain the same, he said.
“We have the organization we need to be successful, and we have no plan to change it,” Séné said. “We are in a very healthy situation in general within the organization. So unless the market really changed drastically, I don’t foresee staffing level changes.”
The company will look to achieve cost savings in its manufacturing processes, even as it faces pressure to reduce prices and gain market share, officials said.
“Clearly, we limit travel a bit more, we make sure we invest in the right projects, and we really manage our overall expenses in general,” Séné said.
The company predicts that revenues will be flat next quarter, landing in the range of $1.76 billion to $1.78 billion, with a growth rate of about 3 percent for the year, Hirsch said.
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