It really was not so long ago that electronic measurement, chemical analysis and life sciences conglomerate Agilent (NYSE:A), was overlooked, under-followed and trading at a discount to its intrinsic worth. The market is always changing, though, and Agilent now trades much more like a popular growth company with multiple revenue drivers.
A Strong Second Quarter
Inherent to the Agilent structure is the idea that the more stable life sciences group can offset the more cyclical electronic measurement business. Right now, though, both are doing quite well. Total revenue rose 32% in the second quarter, or 21% on an organic basis. Growth was led by the chemical analysis growth, with a 60% jump in reported revenue, though life sciences and electronic measurement did fine at 39% and 19%, respectively. Order growth of more than 26% (18% organic) was also encouraging, though this number seems to be decelerating.
Gross margin did decline on a year-over-year basis (55.4% versus 56.9%), one of the few blemishes of the quarter. Operating income, though, grew more than 61% and the operating margin jumped three and a half points on controlled SG&A and R&D spending. Agilent still spent close to 10% of its revenue on R&D, though, so it is not as though Agilent is robbing the future for present growth.
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