Agilent Technologies Inc. (NYSE:A) Q4 2017 Earnings Conference Call Transcript

Nov 20, 2017 • 04:30 pm ET

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Agilent Technologies Inc. (NYSE:A) Q4 2017 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen and welcome to the Fourth Quarter 2017 Agilent Technologies Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time.

(Operator Instructions)

As a reminder, today's program is being recorded.

I would now like to introduce your host for today's program, Alicia Rodriguez, VP of IR. Please go ahead.

Executive
Alicia Rodriguez

Thank you, and welcome everyone to Agilent's fourth quarter conference call for fiscal year 2017. With me are Mike McMullen, Agilent's President and CEO, and Didier Hirsch, Agilent's SVP and CFO. Joining in the Q&A after Didier's comments will be Patrick Kaltenbach, President of Agilent's Life Science and Applied Markets Group; Jacob Thaysen, President of Agilent's Diagnostics and Genomics Group; and Mark Doak, President of the Agilent CrossLab Group.

You can find the press release and information to supplement today's discussion on our website at www.investor.agilent.com. While there, please click on the link for Financial Results under the Financial Information tab. You will find an investor presentation along with revenue breakouts and currency impacts, business segment results and historical financials for Agilent's operations. We will also post a copy of the prepared remarks following this call. Today's comments by Mike and Didier will refer to non-GAAP financial measures.

You will find the most directly comparable GAAP financial metrics and reconciliations on our website. Unless otherwise noted, all references to increases or decreases in financial metrics are year-over-year. References to revenue growth are on a core basis. Core revenue growth excludes the impact of currency, the NMR business, and acquisitions and divestitures within the past 12 months. Guidance is based on exchange rates as of October 31.

(Forward-Looking Cautionary Statements)

And now, let me turn the call over to Mike.

Executive
Mike McMullen

Thanks, Alicia. Hello, everyone. Thank you for being on today's call. I'm pleased to have an opportunity to continue to tell the Agilent story, a story of strong revenue and profit growth that we've been telling for the past three years. The Agilent team closed 2017 with another strong quarter, capping off a tremendous year of revenue and profit growth. We again exceeded our growth expectations. Q4 revenues of $1.19 billion are up almost 6% on a core basis. Reflecting our commitment to improve Agilent's operating margins, our Q4 adjusted operating margin of 23.3% is up 80 basis points. This is our 11th consecutive quarter of improving operating margins. The strong revenue growth and margin improvements resulted in a Q4 adjusted EPS of $0.67, an increase of 14%.

Looking at the full year, we delivered our highest growth rate since the 2014 launch of the new Agilent. Our 2017 revenues of $4.47 billion are up 6.7% on a core basis. We have strong momentum going into 2018. Adjusted operating margin for the year is up 130 basis points over last year. And as you know, in 2015, I committed to increasing Agilent's adjusted operating margin by 410 basis points over