Agilent Technologies Inc (NYSE: A) stock crashes on disappointing quarter performance

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Agilent Technologies Inc (NYSE: A) stock lost over 11.6% on 15th May, 2019 (As of 1:19 pm GMT-4; Source: Google finance) as the firm posted lower than expected results for the second quarter of FY 19. The performance was led by the Agilent CrossLab Group with core growth of 9%. The Diagnostics and Genomics Group delivered 6% core growth, while the LSAG declined 1%.

Meanwhile, in China, the overall business grew 3%, driven by double-digit growth in ACG. However, the LSAG business declined by 1% during the quarter. There are two major factors impacting the China LSAG business. First, the recovery in the food market has not yet materialized. Government labs have not yet resumed purchasing at the levels the company has previously seen. Second, the Chinese government’s 4+7 initiative to lower generic drug prices is having a greater than expected impact on small molecule pharma. Consequently, the company is lowering the revenue expectations in China this year. The other factor affecting LSAG growth is moderating global demand in small molecule pharma.

A in the second quarter of FY 19 has reported the adjusted earnings per share of 71 cents, missing the analysts’ estimates for the adjusted earnings per share of 72 cents, according to the analysts polled by FactSet. The company had reported the adjusted revenue growth of 4 percent to $1.24 billion in the second quarter of FY 19, missing the analysts’ estimates for revenue of $1.27 billion. The Diagnostics and Genomics Group delivered a solid quarter with 6% core revenue growth. Regional demand is led by strength in the Americas. The pathology-related businesses grew high-single digits.

Moreover, Agilent also received expanded FDA approval for the PD-L1 IHC companion diagnostic for metastatic non-small-cell lung cancer. This companion diagnostic would now be used to identify a broad range of patients who may qualify for first-line treatment with KEYTRUDA. The NASD business continues delivering strong performance with mid-teens growth. A are on track to bring the second facility online. The company anticipates initial production of GMP grade APIs by the end of fiscal 2019. Material revenue contributions are expected in fiscal year 2020.

Agilent has revised its full-year 2019 revenue outlook to be in the range of $5.085 billion to $5.125 billion, and kept the year’s adjusted earnings per share guidance at between $3.03 and $3.07. The analysts polled by FactSet expect full-year 2019 revenue to be of $5.186 billion.


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