Agilent results beat expectations, shares rise

By Gabriel Madway

SAN FRANCISCO (Reuters) - Agilent Technologies Inc's (A.N) adjusted profit beat Wall Street's forecast as revenue fell less than expected, and the company gave a strong forecast for the current quarter, sending its shares up more than 2 percent in after-hours trade on Monday.

Chief Executive Bill Sullivan said all evidence points to the fiscal third quarter marking the bottom of the downturn for Agilent, an electronics testing equipment maker, and he said a "modest" recovery could begin early in fiscal 2010.

"Economies around the world appear to have bottomed," Sullivan told Reuters in an interview. "There is some evidence of sequential growth and capital equipment companies such as ours that touch so many different industries will participate in that improved economic environment."

Agilent has struggled in the downturn, slashing thousands of jobs and cutting costs to cope with falling sales.

In July, Agilent agreed to acquire Varian Inc (VARI.O) for $1.5 billion to bolster its fast-growing bioanalytical measurement business.

The company said Monday orders in the July period outpaced revenue for the first time in five quarters. It said it will return all employees to their full pay and full work weeks at the start of fiscal 2010 in November.

Agilent forecast earnings excluding items for the October quarter of 20 cents to 25 cents a share. Wall Street is expecting a profit of 20 cents a share.

Agilent expects revenue to grow no more than seasonally in the period, and possibly a little bit less.

"I think the main thing that investors are taking away is things have not gotten worse" said Macquarie Research analyst Jon Groberg. He said there is some concern about the depth of the company's cost cuts.

"At minimum, they're bouncing along the bottom with the hope that things get better, they have really done a good job controlling their costs, and I think the big question mark is what does this business look like coming out the other side."

SWINGS TO A LOSS

The company reported a net loss of $19 million, or 6 cents a share, in its fiscal third quarter ended July 31, versus a year-ago net profit of $169 million, or 45 cents a share.

Excluding certain items, the company posted earnings of 15 cents a share, beating the average analyst estimate of 11 cents a share, according to Reuters Estimates.

Revenue fell 27 percent $1.06 billion, topping the Wall Street forecast of $1.02 billion.

Revenue in the electronic measurement segment was down 36 percent, while bioanalytical segment revenue was 8 percent below last year.

Agilent was spun off from Hewlett-Packard in 1999. Its shares are up around 50 percent this year.

Shares of Santa Clara, California-based Agilent closed at $23.56 on the New York Stock Exchange and rose to $24.07 in extended trading.

(Reporting by Gabriel Madway; Editing by Tim Dobbyn, Bernard Orr)