Agilent Technologies Inc A
Q4 2012 Earnings Call Transcript

Transcript Call Date 11/19/2012

Operator: Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2012 Agilent Technologies Earnings Conference Call. My name is Derrick, and I will be your operator for today. At this time, all participants are in a listen-only mode. We shall facilitate a question and answer session towards the end of the conference. As a reminder, this call is being recorded for replay purposes.

I would now like to hand the call over to your host for today, Ms. Alicia Rodriguez, Vice President of Investor Relations. Please proceed.

Alicia Rodriguez - VP, IR: Thank you and welcome everyone to Agilent's fourth quarter conference call for fiscal year 2012. With me are Agilent's CEO, Bill Sullivan; as well as Senior Vice President and CFO, Didier Hirsch. Joining in the Q&A after Didier's comments will be Agilent’s President and Chief Operating Officer, Ron Nersesian, also joining the Presidents of our Electronic Measurement, Life Sciences, Chemical Analysis and Diagnostics and Genomics group's, Guy Sene, Nick Roelofs, and Mike McMullen and Lars Holmkvist.

You can find the press release and information to supplement today's discussion on our website at While there, please click on the link for 'Financial Results', where you will find revenue breakouts, business segment results and historical financials for Agilent's operations. We will also post a copy of the prepared remarks following this call.

Bill and Didier comments today will refer to non-GAAP financial measures, you will find the most directly comparable GAAP financial metrics and reconciliations on our website. We will make forward-looking statements about the financial performance of the Company. These statements are subject to risks and uncertainties, and are only valid as of today. The Company assumes no obligation to update them. Please look at the Company's recent SEC filings for a more complete picture of our risks and other factors.

Now, I'd like to turn the call over to Bill.

William P. Sullivan - President and CEO: Thanks Alicia, and hello everyone. For Agilent's fiscal fourth quarter orders were flat year-over-year while Q4 revenues were up 2% over last year. Operating margin was almost 22% and non-GAAP EPS was $0.86 per share. The headline for this quarter is that most of our end markets remained soft as a result of executing on our operating model, we improved gross margins, tightly controlled our expenses to deliver record non-GAAP operating profit, exceeded our EPS guidance and strengthened our balance sheet as a result of excellent free cash flow. We're pleased with our financial results for the quarter as we rebounded from our Q3 earnings miss.

In regards to end markets, Q4 played out as predicted. Fourth quarter revenue excluding Dako was flat compared to Q3. Electronic Measurement revenues declined 5% over last year, communication markets were down in high single-digits with softness in R&D and manufacturing. Aerospace and defense spending was down 2% year-over-year. All of our Chemical Analysis markets remained soft, except for forensics, testing for drugs reviews with overall business revenues down 3% year-over-year.

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