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Agilent Technologies Reports Fourth-Quarter Fiscal Year 2017 Financial Results

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Agilent Technologies, Inc. (NYSE ¬ A) today reported revenue of $1.19 billion for the fourth quarter ended October 31, 2017, up 7.1 percent year over year (up 5.8 percent on a core basis(2)).

Fourth-quarter GAAP net income was $177 million, or $0.54 per share. Last year's fourth-quarter GAAP net income was $126 million, or $0.38 per share.

During the fourth quarter, Agilent had intangible amortization of $28 million, transformation costs of $7 million and acquisition and integration costs of $5 million. Excluding these items and a tax expense of $1 million, Agilent reported fourth-quarter non-GAAP net income of $218 million, or $0.67 per share(1).

"We ended fiscal 2017 with another strong quarter of revenue and profit growth," said Mike McMullen, Agilent CEO and President. "Every quarter this year we have delivered strong revenue growth, expanded operating margins and increased non-GAAP earnings per share. Our consistently excellent financial performance demonstrates our sustained ability to win in the marketplace, while also driving operational improvements."

"We are successfully executing our strategy positioning Agilent for future growth," he added. "We continue strengthening our portfolio through our own R&D investment and M&A, bringing new capabilities and highly differentiated products to our customers. We have positive momentum heading into fiscal year 2018, and will continue our focus on driving sustainable above-market growth and delivering value to shareholders."

Fourth-quarter revenue of $575 million from Agilent's Life Sciences and Applied Markets Group (LSAG) grew 5 percent year over year (up 4 percent on a core basis(2)), with strength in chemical and energy, academia and government and food end markets. LSAG's operating margin for the quarter was 23.9 percent.

Fourth-quarter revenue of $404 million from Agilent CrossLab Group (ACG) grew 9 percent year over year (up 8 percent on a core basis(2)). Growth was healthy across services and consumables, most regions and end markets. ACG's operating margin for the quarter was 22.9 percent.

Fourth-quarter revenue of $210 million from Agilent's Diagnostics and Genomics Group (DGG) grew 9 percent year over year (up 7 percent on a core basis(2)) led by increasing demand for pathology products and companion diagnostics services. DGG's operating margin for the quarter was 20.8 percent.

Agilent expects first-quarter 2018 revenue in the range of $1.145 billion to $1.165 billion. First-quarter 2018 non-GAAP earnings are expected to be in the range of $0.55 to $0.57 per share(3).

For fiscal year 2018, Agilent expects revenue of $4.720 billion to $4.740 billion and non-GAAP earnings of $2.50 to $2.56 per share(3). The guidance is based on October 31, 2017, currency exchange rates.

Conference Call

Agilent's management will present more details about its fourth-quarter FY2017 financial results on a conference call with investors today at 1:30 p.m. PT. This event will be webcast live in listen-only mode. Listeners may log on at www.investor.agilent.com and select "Q4 2017 Agilent Technologies Inc. Earnings Conference Call" in the "News & Events Calendar of Events" section. The webcast will remain available on the company's website for 90 days.

Additional information regarding financial results can be found at www.investor.agilent.com by selecting "Financial Results" in the "Financial Information" section.

A telephone replay of the conference call will be available at approximately 4:30 p.m. PST today through November 27 by dialing +1 855-859-2056 (or +1 404-537-3406 from outside the United States) and entering pass code 2283927.

About Agilent Technologies

Agilent Technologies Inc. (NYSE: A) is a global leader in life sciences, diagnostics and applied chemical markets. With more than 50 years of insight and innovation, Agilent instruments, software, services, solutions, and people provide trusted answers to its customers' most challenging questions. The company generated revenues of $4.47 billion in fiscal 2017 and employs 13,500 people worldwide. Information about Agilent is available at www.agilent.com.

Forward-Looking Statements

This news release contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The forward-looking statements contained herein include, but are not limited to, information regarding Agilent's future revenue, earnings and profitability; planned new products; market trends; the future demand for the company's products and services; customer expectations; and revenue and non-GAAP earnings guidance for the first quarter and full fiscal year 2018. These forward-looking statements involve risks and uncertainties that could cause Agilent's results to differ materially from management's current expectations. Such risks and uncertainties include, but are not limited to, unforeseen changes in the strength of our customers' businesses; unforeseen changes in the demand for current and new products, technologies, and services; unforeseen changes in the currency markets; customer purchasing decisions and timing, and the risk that we are not able to realize the savings expected from integration and restructuring activities. In addition, other risks that Agilent faces in running its operations include the ability to execute successfully through business cycles; the ability to meet and achieve the benefits of its cost-reduction goals and otherwise successfully adapt its cost structures to continuing changes in business conditions; ongoing competitive, pricing and gross-margin pressures; the risk that our cost-cutting initiatives will impair our ability to develop products and remain competitive and to operate effectively; the impact of geopolitical uncertainties and global economic conditions on our operations, our markets and our ability to conduct business; the ability to improve asset performance to adapt to changes in demand; the ability of our supply chain to adapt to changes in demand; the ability to successfully introduce new products at the right time, price and mix; the ability of Agilent to successfully integrate recent acquisitions; the ability of Agilent to successfully comply with certain complex regulations; and other risks detailed in Agilent's filings with the Securities and Exchange Commission, including our quarterly report on Form 10-Q for the quarter ended July 31, 2017. Forward-looking statements are based on the beliefs and assumptions of Agilent's management and on currently available information. Agilent undertakes no responsibility to publicly update or revise any forward-looking statement.

(1) Non-GAAP net income and non-GAAP earnings per share primarily excludes the impacts of acquisition and integration costs, transformation initiatives, business exit and divestiture costs, and non-cash intangibles amortization. We also exclude any tax benefits or expenses that are not directly related to ongoing operations and which are either isolated or is not expected to occur again with any regularity or predictability. A reconciliation between non-GAAP net income and GAAP net income is set forth on page 6 of the attached tables along with additional information regarding the use of this non-GAAP measure.

(2) Core revenue growth excludes the impact of currency, the NMR business and acquisitions and divestitures within the past 12 months. Core revenue is a non-GAAP measure. A reconciliation between Q4 FY17 GAAP revenue and core revenue is set forth on page 8 of the attached tables along with additional information regarding the use of this non-GAAP measure.

(3) Non-GAAP earnings per share as projected for Q1 FY18 and full fiscal year 2018 excludes primarily the future impact of acquisition and integration costs, transformation costs, non-cash intangibles amortization, and other related costs. We also exclude any tax benefits that are not directly related to ongoing operations and which are either isolated or is not expected to occur again with any regularity or predictability. Most of these excluded amounts that pertain to events that have not yet occurred and are not currently possible to estimate with a reasonable degree of accuracy and could differ materially. Therefore, no reconciliation to GAAP amounts has been provided. Future amortization of intangibles is expected to be approximately $25 million per quarter.

NOTE TO EDITORS: Further technology, corporate citizenship and executive news is available on the Agilent news site at www.agilent.com/go/news.

    Years Ended    

   October 31,   

   2017    

   2016   

2017

2016(a)

Preferred stock; $0.01 par value; 125 million shares authorized; none issued and outstanding

Common stock; $0.01 par value, 2 billion shares authorized; 322 million shares at October 31, 2017 and 614 million shares at October 31, 2016, issued

Treasury stock at cost; zero shares at October 31, 2017 and 290 million shares at October 31, 2016

(a) Includes the impact of the adoption of ASU 2015-15 and reclassification of technology and licenses from third parties from other assets to other intangible assets, net.

 

Diluted EPS

Diluted EPS

Diluted EPS

Diluted EPS

0.01

GAAP Revenue by Segment

Non-GAAP (excluding NMR and Acquisitions)

Currency Adjustments

Currency-Adjusted (a)

Non GAAP Revenue by Segment

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