Agilent Technologies Inc. (NYSE:A) Q2 2019 Earnings Conference Call - Final Transcript
May 14, 2019 • 07:30 pm ET
Good day, ladies and gentlemen, and welcome to the Agilent Technologies Second Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. (Operator Instructions) Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, today's conference is being recorded.
I'd now like to introduce your host for today's conference, Mr. Ankur Dhingra, Vice President of Investor Relations. Sir, please go ahead.
Thank you, Liz, and welcome everyone to Agilent's second quarter conference call for fiscal year 2019. With me are Mike McMullen, Agilent's President and CEO; and Bob McMahon, Agilent's Senior Vice President and CFO. Joining in the Q&A after Bob's comments will be Jacob Thaysen, President of Agilent's Life Science and Applied Markets Group; Sam Raha, President of Agilent's Diagnostics and Genomics Group; and Mark Doak, President of the Agilent CrossLab Group.
You can find the press release, investor presentation and information to supplement today's discussion on our website at investor.agilent.com.
Today's comments by Mike and Bob 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 and the acquisitions and divestitures completed within the past 12 months. Guidance is based on exchange rates as of April 30th.
We will also 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.
And, now, I would like to turn the call over to Mike.
Thanks, Ankur, and thanks for joining our call today. Our Q2 results are mixed. On one hand, we continue to deliver strong growth in two of our three business. On the other hand, our LSAG business is experiencing unexpectedly soft market conditions.
Despite revenue below our expectations, the Agilent team delivered solid earnings with EPS of $0.71 at the midpoint of our guidance. This represents 9% EPS growth over last year. We also delivered our 17th consecutive quarter of adjusted operating margin expansion.
For the quarter, total revenues were $1.24 billion , representing 4% core growth. Let me break that down. Performance was led by our Agilent CrossLab Group with core growth of 9%. Our Diagnostics and Genomics Group delivered 6% core growth, while our LSAG declined 1%. There were two key market factors observed in the latter part of the quarter that contributed to the LSAG revenue shortfall. First, we experienced a slowing of instrument orders in China. The second factor is tied to more general slowdown in orders from big pharma. I'd point out that this slowdown became apparent to us at the beginning of April. Let me explain