2/24/2003 - Agilent Technologies Inc. (NYSE: A) reported orders of $1.36 billion and revenue of $1.41 billion for the fiscal first quarter ended Jan. 31, 2003. On an operating earnings-before-restructuring basis, the company lost $0.23 per share.
After $12 million of non-cash amortization charges and $42 million of restructuring expenses, the net first quarter loss from continuing operations was $112 million, or $0.24 per share on a generally accepted accounting principle (GAAP) basis. In addition, the company took a $257 million one-time goodwill write-off in the quarter related to the adoption of a new accounting rule, SFAS 142.
"Our first quarter results were disappointing," said Ned Barnholt, Agilent chairman, president and chief executive officer. "Orders were weaker than expected due to a general climate of uncertainty. In addition, margin pressures continued to impact several of our businesses. Based on these results, we are taking additional aggressive cost-cutting actions to return Agilent to profitability during the second half of this year."
Barnholt said that Agilent's orders were down 22 percent compared to a year ago in the Americas, about flat in Europe and up 7 percent in Asia. "Our first quarter results reflect a collective hesitation by many of our customers, who are deferring capital expenditures. Geopolitical uncertainty, on top of the general economic weakness we've experienced in the last year and a half, has resulted in a continuing pattern of weak orders."
While all of Agilent's business segments were relatively soft in the first quarter, the company said it saw particular weakness in its semiconductor equipment, test and measurement, and chemical analysis businesses compared to prior expectations.
"Our near-term outlook calls for a modest improvement in second quarter orders and revenues based on a rebound in semiconductor equipment and seasonally higher semiconductor orders," Barnholt said. "However, visibility has never been worse, and we have no reason to believe that business will improve materially in the quarters immediately ahead."
To date, Agilent has achieved about $1.25 billion of annualized savings from its previously announced restructuring programs. The company said it had expected to finish this year with a normalized quarterly breakeven cost structure of about $1.57 billion. The new actions Agilent will take in the next few months will reduce the workforce by an additional 4,000 jobs and bring the company's cost structure down an additional $125 million per quarter in order to achieve a fourth quarter breakeven cost structure of $1.45 billion.
"These actions will be extraordinarily painful, but we have no alternative," Barnholt said. "Agilent must return to profitability as soon as possible. Our commitment is to move quickly and to make the critical trade-offs that will ensure our profitability without jeopardizing our long-term success. We are confident that we are up to the challenge."
About Agilent Technologies
Agilent Technologies Inc. (NYSE: A) is a global technology leader in communications, electronics and life sciences. The company's 35,000 employees serve customers in more than 110 countries. Agilent had net revenue of $6 billion in fiscal year 2002. Information about Agilent is available on the Web at www.agilent.com.
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