A - Earnings call transcript Q3 2018 | Agilent Technologies, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Q3 2018, Agilent Technologies Inc Earnings Conference Call. At this time, all participants are in a listen-only mode.

Following management's prepared remarks, we will host a question-and-answer session and our instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes. It is now my pleasure to hand the conference over Ms. Investor President Vice Rodriguez, Relations. Alicia begin. Ma’am, you may

Alicia Rodriguez

Hirsch, Agilent’s Thank call conference Mike Agilent’s and to CFO. President With you, and welcome, McMullen, Didier CEO; and Brian, third President Senior for are Vice and quarter me everyone, Agilent’s fiscal XXXX. year

Joining President comments be I’m of Mark and Group; President after Agilent’s Jacob today Applied Markets Doak, Didier’s Sciences announce that joining to as is the and the please Group. Agilent’s Diagnostics also Life and Q&A Agilent President Group; in Thaysen, the MacMahon will well. of Sam CrossLab on of Raha, Genomics Bob us call

you know, Agilent’s Dider’s as due As role to will he retirement at on of the in end September taking CFO the be October.

information website on today’s and You to supplement at can our find discussion press www.investor.agilent.com. the release

please click under link tab. for the Information Financial on financial the While results there,

investor revenue segment operations. You along results will historical and business financials and presentation find for Agilent’s currency impacts, an with breakouts

the comments will prepared non-GAAP We copy this refer Mike financial Didier by call. to measures. also will following remarks and post a of Today’s

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

And SEC other look a assumes as at for of of complete I’d uncertainties statements to the are to valid to We the update The turn factors. performance risks like our are company Mike. will more financial over filings These the subject call risks Please of make company’s to picture the recent and now, no and them. also company. and about forward-looking only obligation today. statements

Michael McMullen

Thanks everyone. us on for Hello, Alicia. Thanks, joining today's call.

McMahon a join I'm Many role updated know Bob of to from capable an is as record successor September officially the track next CFO QX excellent Bob to highlights the leadership X. call. Agilent’s and of very already role choice pleased his the you CFO have discuss I a our our previous for Bob team. financial Didier. assumes outlook Before and Bob beginning brings Hologic. strong to He of CFO

match Didier in where hands perfect immediately and at help As perspectives at their an baton, conversation retirement serve culture met exciting Bob a he'll on I October. great and of fit culture. coffee capacity would lead the Bob business smooth approach Agilent the for our his business Bob first the of I I'm will joined phase an a of and to creating style a acumen time. us and our next that knew shareholder value. are for course growth. end importance we Agilent confident of the working values management a shared his has are had an about in be business. Bob he Agilent Didier to over Palo and Alto until company ensure transition. in important together advisory We

capable CEO the role key to our partner. CFO. for played has the business company asked in While have the the join a counsel. of and have couldn't have and excited I'm to It's Agilent a partnership He I better will results. very Didier's I miss a for important Bob transformation greatly team excellent very

thank you So Didier.

our me missed You Agilent will be by team. and

strong both exceeding another turn our quarter financial Agilent Now, QX earnings delivered and The let our expectations. team growth with me to performance.

core guidance. high-end grew and our Our the revenue X% of is above

an margins. margin increase since core improving guidance from our XX% consecutive currency This a operating We operating an above headwinds XXX This high-end of $X.XX our points XX.X%, despite the Our delivered increase XXth of our year-ago. our which is basis quarter adjusted adjusted EPS of from guide. a $X.XX marks is year-ago. last is of a of

at Let's look results our take a closer by our end-markets.

tough We QX continue molecule core see compare across we in small 'XX. our as biopharma strong Cell is mass genomics. a growth. spectrometry, services groups CrossLabs market all consumables We particularly remains both against Analysis, in grew performance segments. performance with XX% Pharma strength with X% our and This business the in robust and and strong Growth

Our grew XX%. Chemical revenue market Energy

of this Asia rate are China led market. in investment quite spite genomics of this our positive. Management and delivering strong grew in pleased double-digit X% CrossLabs Geographically versus in perspective, performance expected, Cell of Pain government China the the Revenue were and a strong overall GC, strength in and sales last in offset also This spectroscopy, From remains difficult is be partnership services year, quarter. Environmental X% rhetoric the XX%. a hearing with growth. X%, in and Diagnostics molecular compare is again declines grew reagent consumables This Americas strength in China this in declined tariff being Europe and are flat by market business. is are a We challenges tough revenue growth, are of line news. end-market. quarter. against revenue result. CrossLabs continued XX% the spectroscopy, consumables instrument results. U.S. policies driving strength the product in and you'll prior-year and strong in clinical the gains forensics from compare rest expectations, and Food this and global with and services offset is Ongoing Europe academia Analysis, by down growth driving ICP/MS growth leading as retaliatory this in

of offset slowing China. me of let environmental. start the an expected with Forensics overview sales Geographically, temporary first growth instrument in was by China

growth Pharma quarter. Our overall remains our Energy. China business Chemical is and two XX% largest being China end-markets, this in growing strong, double-digit Strength and driven by in

DGG grew also Our businesses and double-digits. by CrossLab

strong instrument with and we the sales We quarter in high-single-digit the in of conditions. delivered also slowing stand summary, overall the than Asia on of flat market continue performances outside China delivering and The strong to XX%. Energy, with markets. Chemical Americas expect of growth. healthy, and markets. environmental In temporary is offsetting two food these the broad-based more healthy Europe of out rest China, and business is This strength a in Pharma, a regions compare was & any tough

and perspective, be Now, the results. robust let's Geographically in well continues growth and are demand by results. the and are Ultivo results result markets. business LC/MS Energy and Cell China groups. game-changing leading From The in is core a product Markets X%. quad to delivered being the received. discuss ICP/MS LC/MS, Applied Analysis from revenue our This Life three Group driven triple leading our Sciences America Pharma Chemical growth of

depth of Let few and share strategy me examples breadth a we’re of portfolio. to solutions LSAG increase executing the our how

LIMS front, and services. adding the capabilities Genohm's On very By customers. closed as informatics integrating OpenLAB on laboratory can to M&A informatics focused into early lab Genohm create integrated portfolio, efficiencies. the of acquisition to on a solutions by Genohm we are and provide we Customers management in our Agilent informatics drive complements platform our insight May. complete way

in lab determined to lead are informatics. We

a exchange, of ADF storage and labs format in software data Agilent for week to Allotrope supporting analytical Format across by consortium industry. companies new the or able of By will captured example, pharmaceutical the was first created and platforms. the transfer called for For laboratory data short. data be standardized the last This collection, workflows, share pharmaceutical format Data released the standardizing

both of ADF to first adoption will believe We We of to proud of product Informatics and like the commercial solutions. develop be are our support standards a adoption future and Lab to shape the the company launch this drive standard. the

our product to We XF how ATP their in will time. the new enable biologists innovation addition, enhance just understanding LSAG Rate internal unmatched of continues to kit. Real-Time cells engine Assay In and This deliver. live Agilent functions released real Seahorse

in a energy expand are and performance by core in chemical with live all CrossLab fast is growth. Agilent. consumables markets market. strong China leader growth in and teens to Agilent outstanding pharma double our regions across services. The Performance mid Food. a offerings analysis group results across We led continues new X% this growth the of growing in led and growth was digit revenue driver balanced continue key major and CrossLab end growth. with cell Gains in our

improve We and science delivering academics labs. on customers mission our both the of the are a to

for expand we the the customers and As value strength our in Agilent. we more are CrossLab creating platform,

materials. example, For consumables the to acquired we announced quarter, we On two for assets provider business a reference further provider acquisitions biopharma during Scientific, portfolio. consumables standards the of X, also ProZyme a August certified expand and We Ultra of analysis. glycan chemical of acquired our

biopharma glycan of and in you essential participate we As now directly will this analysis drugs know, development growing to market segment. biotherapeutic fast is

recently is We first support invest to our This our and of position enable us our hub parts logistic continue opened in new we improve service delivery This on the five China. and Shanghai. at which hub locations will to customers. the consumables we build a in and laboratories. are to stocking This allows speed establishing. forward faster leadership supplies of We

gaining digital on also focus delivering Our investment is traction. in results

channel digital growing pace. is record Our at a

the time ever on the front. orders consumables this are now For China is digital. first XX% charge leading over of our

experience, buying diagnostic core and revenue expand customer The of reach X%. the group improving are driving genomics customer growth. We growth delivered our and

tough revenue which the Excluding the core in delivered as expected against X% declined compare. business, a quarter our group NASD DGG of growth

explain. Let me further

based, which on the As can mentioned depending NASD quarter-to-quarter of we've batch revenue make acceptance. timing revenues are from customer previously vary

XX% the year. As up is going quarter a of expected, in growth declined the against business as last QX in rate

QX. We growth expect the to in return to business

growing on allow quarter, the a As I'm NASD grade capacity comments our strong pleased market just few I returned this new GMP meet business I with mentioned, with team CRISPR us our our visit offerings. in our demands environment. on to grew underway without revenue Colorado. DGG this expansion progress the The for A from oligonucleotide reported facility and will effect, and business, core of variability X%. our additional

treat business. play about the China growth to Back received I'm excited growth a is For and most news DDG by long-term reagent example, first-of-its-kind Japan in double-digit of for growth and to in drove partnership Pharmaceuticals our disease. for targeted one a rare NASD last the customers, Alnylam for results. RNA-based and future. therapy This FDA patients. overall their week, are outstanding Alnylam Geographically just the results driven approval wonderful importantly a Onpattro, Agilent in remains results. strength Strong our genomics and

We cancer. in continue China Dx are fight panel own as our product cancer lung FDA their the part PD-LX Burning diseases. to Agilent kit. for and detection against expanded human ability this USDA approval NGS received approval our support cervical other cancer reagents diagnostics strengthen and SureSelect companion of Rock received to used

on more and existing builds we a for solutions of solutions, other capillary for acquisition provides business automated NGS's a quarter, driving AATI the Agilent's to strong drive applications. of Technologies Incorporated. new providing of and base the Analytical expertise AATI, analysis electrophoresis Advanced NGS customers fully completed molecules. to During range acquisition of with for workflows set comprehensive Agilent. this growth continue of will This

addition our financial restatements. complementary create includes we with our the a has new financials division AATI team microfluidics group. business, this of DGG. analysis current This of along LSAG also change with Didier's With division the part reflected new in company now team, biomolecular previously the

me a remarks the Didier. where journey the call let before in on Agilent Now, provide outlook near-term over and we few to turning our are

tariffs. Let few on me start with comments a

On buying side, in customer seeing changes customer are the not we behavior.

in duties. been we This the $X.XX QX we X.X expect impact impact In for planned our to front, the small and QX, duty proactive partly EPS million have of tariff-related incremental approximately of incorporated into costs has on resulted offset On or taken actions increases expected of XXXk an latest guidance. impact approximately approach which of our results. duty in a have

our the place, changes Looking to potential if and remain aggressively tariffs our via Supply into prices the adjustments XXXX, further to in remaining reduce effect in Chain. we plan

$XXX another demonstrated in we've quarter time, commitment of capital a our and a sheet results also our in business. strong and repurchasing out We value. on committed. own expanding on to customers. shareholder creating operating putting through flow core shares We balance been QX and closed We're while million of paying to growth, value operating returned in shareholders dividends. path We our as We've delivering increase $XXX million the to our deploying investing capital $XX in results strengthen our more our announced four This out delivered for and been some while impactful a for and is For cash growth. record the two shareholders margins quarter million in to Agilent more further and focused foundation acquisitions, strong paying number work acquisitions. will manner. $XXX continued for strong company's million

via success portfolio customer continuing portfolio agile to our way improvement focused to Agilent on experience Agilent of our we aggressively continue execute efficiency twin and we of As also drivers M&A, customer the and a be are innovation business. strengthen strong initiatives. The engine our and a continue to doing

Now outlook. outlook Agilent The continues a few about our on confident our forward. healthy team in going We markets. end to words capitalize remain

to our Didier guidance. Agilent team's increasing growth, and the our committed, full are will year The I our insights operational on call team We now growth walk remains guidance. growth core Mike, who Agilent call details, expansion. more would excellence. fuel Didier? but and Thank drive raising and everyone. with our our It revenue and is Didier financials the to you EPS. your will customer innovation and coupled confident forward questions. to through for <> DNA margin that QX this guidance earnings future you on future. hello, powerful is In our off look share continue core and focus hand for combination energized I about we're you, the to our ability earnings being will Thank answering operating and

me Agilent. for the is accomplishing all support and best continuing Bob's creating in the mission, yet for for value that With express convinced the their and come finally passion Mike's my for to years. let Agilent leadership First, I'm and contribution professionalism employees' appreciation shareholder

by mentioned our year-over-year bottom delivered and results, As guidance. basis and we strong top both line a on Mike, versus

acquisitions front, ATI currency $XX guidance Scientific our midpoint On of from the recent and million, after we ULTRA of two revenue contributions million. our and by excluding $XX headwinds $X million did

guidance core X.X% midpoint growth X.XX%. was of of Our over the well revenue

a adjusted of our over of XX%. incremental XXX basis operating points Our over core points $X.XX of midpoint operating was margin year's the delivered margin XXX guidance. were EPS and and XX.X% basis last we guidance about

in for quarter and million we X.XX the of million $XXX shares back total paid During dividends. million bought a $XX

for we offshore billion I'll quarter. fourth $X.X repatriated our guidance Finally, of now turn cash. to the

core to billion We projected negative EPS $X have $XX revenues $X.XX grow QX a of expected of and is Versus guidance, expect previous basis. the to to midpoint, million is operating million to and of $X.XX. At on $X.XX revenue impact $X.XX profit. FX on on billion a revenue X.X%

in be Lasergen as Our XX.X% funding actions XX points actions. And approximately tariffs year-over-year adjusted annualized those a early R&D. The negative basis operating to XXX will margin chain. to $X expected at effective up sequentially a basis million complete midpoint mid-XXXX, points July we are basis the our initiated up on have and we impact after pricing even potential supply increase of the million, actions have $X.X expect net be impact excluding is to

guidance is the fiscal fiscal the in to year QX guidance to The following Now result XXXX. expected year guidance. of

and guidance billion of with XX a ProZyme, negative is midpoint, of basis previous previous First, the revenue Scientific, impact grow over on million projected including revenue $XX core million. X.X% having Ultra over at the guidance. points of a basis or $X.XX The acquisition guidance AATI, $XX to $XX to due million is currency

$X.XX EPS increase. a previous at on corresponds to guidance XX% midpoint is up of year-on-year Second, guidance $X.XX our and

or the Didier. basis you, fiscal And higher operating give the Q&A. I'll operating adjusted be expected Thank Alicia margin year, than the to Q&A? year Third, our to instructions that, our model. XX.X% for fiscal of the core With Brian fourth, operating incremental turn Thank over is it 'XX. for XX please for you at margin year the points the is high-end in XX% to expected you. will for be

Operator

the first question Instructions] [Operator thank ma'am, come Steve Morgan you. with from line Stanley. of And will Beuchaw pleasure, My our

Your line is open. now

Steve Beuchaw

and echo being partner not help say first for thanks us, really to here Didier, aboard. the I comments. Thanks see and for great you've I'd Mike's of to a all time. everything go hate appreciate welcome the such hard it's done some guys. Hi so for Bob, you

Didier Hirsch

very you appreciated. much, Thank Steve much

Michael McMullen

There's Steve a for room those in smile the big thanks comments.

Steve Beuchaw

of someone through; you kind shared would in a Mike. who When I'd we're you after for going just really to have set that. what match very be of is really terms I helpful the for saying beat out we unique in you good to to look here in are core, had his first it the a say things to confident us pretty going on The guy, guidance focus better? quarter, at you I'd earlier it's for to say raise as to to made high-level expectations like maybe talk to the What lineage, be some year. decision questions Bob, Didier the hard that is jumped going of

Michael McMullen

the to you. Great question opportunity share that appreciate with Steve,

Chemical then strength strong geographically we Asia in sort so a think of in might I both rhetoric some for marketplace the actually China led perhaps to was Americas us. quite and business, so of a good months strength the quite that there occurred, things of So, that will level plan the the lot wildcard the know, really this strong end-market as very not gives which Chemical and fact what obviously this is two around at be of all I a to the detrimental was really that and funnel and be Pharma have of of be story Energy view that we dimensions which Energy one forward the the continue One you orders, strength, here. gives as positioned upside and and our moving of the confidence both all our order two ago China, but a year, coming has of by sort is confidence end-markets, to posted also it's continued concerns the and those had few of tariffs we other me me were strong. into think And number

in are China our win. perspective. well the to geographies about gives positioned United countries that in And a terms us think doing market quite we're a really the confidence outlook fact and largest States lot of think well, of the from two I really I

to the have continues growth much that's this platform become unique to more which of CrossLab out portfolio Our lot capture allows us well. know really as we competitive value there proposition you and with as a

Steve Beuchaw

wonder Any that how front? great. you've should quick just that you what And if sounds really I so that you be on perspective it follow-up could jump One is good. then minute on done really about quarter helpful tariff quarter made strong incremental Mike, you've margin on it was the just a appreciate about on the think changing in you But color some the us queue. anecdotes before we even follow-ups doing is Didier It behavior people what aren't good tariffs the a that the and a like it about give there. couple if comment what will think point? spend really appreciate there is made core on And that they would And terms do. of back in customer I I headlines your the could another seasonality really be on is expansion, it. way of Really seen it. then

Michael Mcmullen

Let on the me take first question.

in So, on we for industry, will when growth people we in and a their our critical long sector, if I absolutely research they're solutions in research our -- are plans taking the enabling purchasing of in their talking term to and plans. view have investments people on be you to base, they pharmaceutical it purchasing been the the space, equipment, whether customer private to academia out the talk talk plan

by discussion. not they're tariff at So the all distracted

aspects changes situation so approved. bit chemical to As have were cautiousness the quarter, a we seen my behavior. but getting customer call, It's the kind I they little deals, some the energy same new the of mentioned last where no buying we in market in had last still deals slower approve of certain on

this coming conversations from So with customers. is directly I had

actual not but affected adjusting relative all again, terms duty buying of really out of that to in and the to lot any locations of the any work real despite rhetoric a So our customer of behavior us of about things, buying confidence gives production Obviously chain seen mitigate it's side creating customers. there, hasn't outlook our for because it yet supply changes. us impact and some have behavior the noise

Didier Hirsch

we And incremental bit the operating Then operating good certainly It's QX. leverage, The a little on soft last sequentially compare year's had to expect good of impressive there such high at level right. margin. started all been then down are We operating of Agilent margin with a your compare. a margin Agile from impact Steve, reasons mix that the we and was of you're a was operating little certainly core question the maintain off multiple, on bit the don't XX%. programs

Michael Mcmullen

Part --. of gift your parting

Didier Hirsch

that's off Well, from I for the Agilent certainly gift team sure. appreciate the send

Michael Mcmullen

to said of allowing But meeting Didier York, seriousness, the outlined as in going think programs our I things New the pipeline in of incrementals. in back all as really listen, few are AID the where our us robust terms on margin some ever at that and operating work he to

Steve Beuchaw

guys. much, so Thanks

Operator

our will from Thank you. JPMorgan. come next question Peterson with the of And line Tycho

Your open. line is now

Tycho Peterson

dynamics, in some you Delaware. I Can out China. puts well in maybe some a you TC so in the there? called could of you And Thanks. follow-up weakness I think that talk on there where the takes bit? to maybe and I in can environmental some Hey. slide, maybe out you think the production want you of if the maybe about do flush softness. little Mike there as of supply the talk then chain as some strength

how So may if thinking are you Supply to? about moving be you need about talk potentially Chain just can you

Michael Mcmullen

to Sure so Tycho. so do happy

growth our happened the relative the realization to in foreshadowed very business. two then happening -- to the So end-markets important relative were nothing hey some us country the in call we let's strength in business, Again saying, had coming us actually there's in by the start side all the strong for market ministries this some know competitive delighted last to you we of things we and if so but six with look had and just at we China.

investments opportunities in and hints talked strong, Government with I continued recall presentation, our of Pharma, Academia of we AID CrossLab our the the situation we double-digit deliver really strong in had a may tariffs. and environmental comments and made Energy, demand those about food really some back saw to strong as and in Chemical it's with and around And in you as we temporary So related instrument you us those businesses, starting think DGG business in to growth then purchases. on to and saw our business, to promises both the relative we

have services to You to then it's really mind will we the buy continue the happening us go and follow know-how have to from they are money going that consumables in and keep reorganization though budgets and waiting here. finalized we're things just the where because to complete, two to

are money ready You've capture of it's deployed that on cities budgets and is they call got part there. new be a of X consolidated money created, created once new ministries what also consolidation we'll tier to and the in being X set and going where following we're getting then to the so

Tycho Peterson

Chain? then Supply on the And

Michael Mcmullen

in products subject already some the production tariffs, we're as aspects I of that tariffs, to my so I actually Chain, production the yeah about for advance the in announcement China-made formal in of process also already the so mentioned we've Oh, Chain script, the in our Wilmington actions we've and moving which forgot the Chain. of now the site of in Delaware to relative Supply Supply some moved our Supply relocated took into we is of the but

Tycho Peterson

the for fourth should it'll and of just inherent then capacity year in coming of the business return follow-ups, fact that you ahead talk maybe the just quick Okay. lumpiness kind in of NASD how the the highlighted ramp And to Can you next think there online? quarter. we about two growth

Michael Mcmullen

plan starting the get you next current of out on ramp to some able be see the we're is start of… current initial number a to think growth, our the quarters, we the start Didier as is put second-half to as the I expansion then possible going of through try 'XX, to growth we'll and line facility revenue and in out year. of to, second-half to much So will The come

Alicia Rodrigue

year, like at is what about said Next we $XX million AID.

Michael Mcmullen

mentioned capability construction started looks review gets customers, when so when chance So and and next real demand but as Bob the I to the encouraging. the it really what's expansion, perspective also year of full were to on and and then the get get relative Colorado Didier I pipeline progress going XXs you and you had a in really into facility just also from and ramp year

Tycho Peterson

you one, on growth this C&E point? Ultivo can Last how just comment to much at is contributing

Michael Mcmullen

think the mix, growing part its I average. the of with

I I but wouldn't it's solidly outside an think contribution, that's it. delivering. say

Tycho Peterson

you. thank Okay,

Michael Mcmullen

Welcome.

Operator

Thank Schenkel Doug come our with from next will you. question And Cowen.

now is Your line open.

Doug Schenkel

glass us it I forward to point of And Hi, Harvey great your the before will I always good be help Agilent some speak choice. of afternoon. and wine to know at and we a look I really Didier grabbing soon for another you've at leader many get been years questions as another thanks and can't saying to I your appreciate the over

Didier Hirsch

Okay. Thanks, Doug.

Doug Schenkel

while great so Bob to congrats great choice, through made And it's company. Agilent shoes such to fill, big know has the they and

core to rate of the versus can prepared growth. of rational to this this what or a deceleration X%, year. for This comparisons at a dynamics don't underlying remarks most quarter what growth hear in different. be you and X.X% questions. the talk your about more now behind bit that saw So anything that's QX in appear would much for spite we I On it guidance, around fair here? you're generated some assume admittedly you having in year-to-date. the in baking wouldn't why a I've changes time momentum Is out figuring regarding continue conservatism timing hard relative didn't

or or markets something something on missing else? timing I am So dynamics end

Michael Mcmullen

had Didier and last I we for think the decided stay we year retire. to though true guide to as even

or calls, way be So the assume as perfect prior going always Didier we one one could chemical quarter. energy. that don't go in mentioned the another has been And again, has everything's in to

that up, if holds has it we number. beat to holding business in up been So be and should good that position a

Doug Schenkel

sort in of stock the for Great. low-XXs And much buyback the standpoint, of related the from >: was a then quarter.

million to in bit $XXX weren't I'm about if active math another ? I'm there authorization. in dry buying wondering you certainly buyback little still quarter the think shares doing right a in enough not more powder during place there's have why you put that authorized and I just the

Michael Mcmullen

Yes. : Doug. that Thanks for

from we've right numbers about the XXX, think think -- XXX I I a... are

Didier Hirsch

Michael Mcmullen

in Bob during we dislocation anti QX that bought what outright look aggressive after away continued we're And the quarter. saw actually right after stock you're right because went So continue at price we range. the to a and the the -- $XXX we the announcement then in was obviously and million dilutive. upcoming fairly We

Doug Schenkel

one Okay. last one. And

You guided early or on food is revenue that few Based rebound fiscal to little aggressive you've us a that more expect tell maybe this anticipated? to to start months, past start than would seen quickly would or thaw anything you tell growth things China the us what over XXXX. in

Michael Mcmullen

with want to I think I stay initial those estimates.

call our So last of want we things. the It a work good six kind hear along takes I released to from the months lines. I tracking to it's and experience. same think signaled team, that these so or my in for And

Doug Schenkel

Okay. with of Patrick next Sachs. right. Thanks come will question Goldman again. All our from Donnelly And Thank you. line the

now Your line is open.

Patrick Donnelly

Thanks. Great.

being And revenues revenues same and is being U.S. thing of from export majority much walk given import the U.S. chain looking from of China, supply how you could those imported of China on kind revenues explicitly us is question just be Tycho's the the the then dynamic on the the just in tariffs anything China expanding on focused, kind where being there. and Just of imported manufactured? through may

Michael Mcmullen

to incoming Patrick to looking after the you're both and at U.S.? from China the China

Patrick Donnelly

Yeah, exactly.

Michael Mcmullen

of the the Agilent's support parts. to primarily U.S., China product it's and chromatography from related a relatively gas amount line So small It's business.

why the XX% as end to GCMS not million and going annualized and mentioned, impact. $XX gives at you of we're potential even the going U.S. and adjustments from be made reduce about the $X update U.S. we'll the over many we but that future then there's us million to on gross chemistry So really might that in import day. basically, $XXX in that's And in we that impact an And about then the is the this significant before it's direction, the million amount the China, pricing stage. tariff basis. other reagents on it's the no time the at There

$XXX and from the before this in the amount over the potential And $XX in GCMS as that we there's update tariff that significant future us reduce but in end retaliation. impact other U.S. to going the the on chemistry the annualized many and subject the basis. the And gives $X import you is mentioned, pricing we then impact. the gross it's it's XX% no There the at about day. might made million to at reagents adjustments time be of really million to on not that's and we'll not China, basically, about So why an even then direction, that's that million going we're stage. U.S. But

So have business lot tariff outside basically our we a of of discussion. this

Patrick Donnell

through the talk in this in you data quarter? how points were kind just given of then just quarter in was China during That's tariff so you feeling. the this China staying you and helpful. soft results curious including just How data July And light kind can the month then trends China, also July production guys in of cadence of as increasing rhetoric expectations, went in given particular morning through are the the that out industrial of coming

Michael McMullen

Great saw field so same any well, no question, what no it I have things as signals that on or impact were having was saw different. we we in customers I that and hesitancy saw from article our based

Patrick Donnell

the come question will Operator: Great. Brandon next Couillard Thank of you. our Jefferies. Thank And line with you. from

expansion a the a probably years pursue quarter looking eye overall changes in any region? be line curious in quarter secondly, you well, and Yes, a you open. question. what how the lapped about as the really be now : next little so I to did second is and This as And environment is I a probably did approval the more might company facility? derive barriers capacity that Europe, it we too you're I a the seeing be I tough capacity I Thanks. market quarter. the at I made color of Mike, Your the with this in in the just leg no over-interpret comp if capability the curious might business. the you if wouldn't guess third Realized make end-markets could in on that might do have in next ago. Alnylama that give what obviously into for in you tape, whether in do but the tough flat saw it's compare think afternoon.: to us there, more think to it position I think just decision but lead on to was just is again, the results. probably and keeping in the a about speaks not mentioned quarter's to already high that Thanks. the to changes kind I teams it's thing an one bit say little quarter broadly the is that? Thanks of indicators Didier, the we but think now not dramatically I perhaps guess but World result decision across and fair expected worried spent the say is we're mention we and to it that that is about than very was reason results. last overly situation dramatically, When of could this wouldn't to QX two our the the funnels to thinking build-out in and with unique get and Turkey made margins and slower the you I field sure. spread on significant look right the over-interpret region you're should actually to : some entry third Cup, The time that good. I'd year, good different. a that NASD this ultimately investments only was even you why the Europe, European We've at pretty

think Train made Train volume for up an be the doubled button there compliment ready one our we point that the more firing know on push on their likely the B. So only something? yet and demand as to As are : is is around then to going B drug. fire will up we're you confirmation Train as certainly commercial market's the capacity, facility the recent of that to a Didier, based success we are the customers orphan into our forecast move not most which still we we we'll and high And proof It's announcement not waiting in want add about and you space a I decision A for products. the

at just products We're cost much built ready of be market. that's a see up this facility commercial the the bringing that obviously certainly one for cheaper than It's there. it's are confirmation the train So onto insight Didier. lot a whole bringing when we we're and clear. customers Thanks on additional this to our

Very you. second Thank Next Thank XXXX roughly : million could missed revenue million Yeah. kind train of additional that was on then so good. : B. what bring you. it, $XXX we year, That's Train Yeah. half the it's I with up Operator: or picked on another to I sorry. ish Didier of referring line. $XXX

Dan next with question the from Bank. Our of we Leonard come line Deutsche

Thank is couple a be line open. : more you. on Your China. May now

calling peers' the are does food your heard now it something and report Agilent out. that all and environmental uniquely seem First off, that headwinds is you

in So dynamic : opinion basket to micro are share Is happy reflection of of Or have do any Yeah thoughts you product these just on customers? there the my customers that maybe here. buying? a a why? some share

is in It's occurring. leader there here. we uniquely consolidation on unique are something is going the ministries the the Agilent to So where because

why calling there. that's you're out, any seeing where us probably business So others have Agilent didn't

going most There's And hearing related be rightfully to kind and competitively move really macro we that's really region the grew was in a is happening effect as for you just remind company. us things And new just we had and the of out. color. follow-up. quarter. seeing growing is as terms where third call this then why the double and That's a So other we're it issue. think not It temporary the in nothing ones we're a in you're out impacted business sharing think offerings. getting digit I people fastest Agilent helpful the to It : of I overall situation again, a tariff strong China major

mentioned include times you So that actions. effort couple assumptions your a pricing don't of get remediation

Yeah. So is or you some could have you to comment could price the of your lever product you lines? expect on Do pricing power? a affected you : that you get in think ability Would pull not?

that one impact. offset tariff call is in indicated I can the my price As area you to use

it on increase have platform. on may opposed You product this broad based a the to whatever a or would more be as XX% core

broad based have comes down the the back that. Again, be will it it differentiation of think we So portfolio. we do and ability to to

have from a If able you truly do in with to be your competition, position that. something differentiated to value you're a

on You're : $X : you. math mitigate next will not tariffs : increase we're the So concerned in $X of question Operator: with on offset our on Thank do glad me the overly welcome. you that come to could And line Muken : to I'm impact the tariffs million the P&L, impact. Thank : as for that. ISI. Didier now. Ross you. Appreciate thanks. from of Evercore Thanks about million ability right revenue color. the our net on X.X% for the stand they

seen now we'll is a forward it’s a time view. line jealous echo Hey Didier with I and as Obviously spending quite more Bob guys. business Your VJ open. with the great transformation but know through working I very you the we've you to is get : time you been ramped. look and

thanks for foreshadowed aspects growth there it maybe been have in bit performing this space significant way than just maybe share see feels Agilent and the there's to largest markets some the taken of a : important all on may market. opportunity the bit feel we're you comments is add for to cut strength, but you've our you you other give Agilent maybe to peer to really into is believe think of ask area Mark business. the about in portfolio our you the you've CrossLab want start can this and we that at a business has you're and the how to to as feel maybe take This And Yeah, really called to the of to and like really see is happened regulations often driving be maybe Mike again this and have that for of one Mark out emerging this some a the Pharma. space, seeing of go like side as what any level, platform those. we lot I'll take few what broad-based LC/MS of after breadth maybe outsized Pharma well time It here, Thanks, a strong and of in your particularly us or there's maybe ago versus that group? in a of a Pharma gaining this that the can like make mass just So seems little area, -- has but really obviously have of Pharma the on numbers you would product strength segment Ross but picture response to developed if truly on are portfolio, And : in top allowed being performance focus we've and important could be both it, product comment we ICP/MS for comments better new the platform quite number I little out us us. the so what you on in bit? we have of few can we share growth a a starting spectrometry as a

times, mentioned business chemistries productivity mentioned or lot overall our Pharma and enterprise many lot part continue chemistries coming particularly mid-sized at we're very moving in that to for smaller management Pharmas we in that services, space and the Pharma of pieces the some together biopharma better in business of biopharma And address That then companies in of business we've AID we've looking our the we at into better general. area, and a assets, they're the large. is going think that improving invested see of certainly well, strength to when in I complementary as area. around seeing the the a too the

story long short sustainable. So it’s been is very

: space, growth that past high-single-digit Certainly the in think the just portfolio Ross continued I product in see on years going that we're future. I'd planning on will this And keeping momentum this. and way. it close lend we've our few over off to

to I think able been scalable Mark platform, develop a right. has

being So is over well. discussion used medium-sized Pharma : the to think with before to only be Mike. as the Pharma game platform large I and focused helpful, and That's scalable on small very

one for Sam, maybe some so And you've done acquisitions.

with at of You about front of It tuck-in like M&A pretty division. for reverse questions. you it closed way. doing out a made broadest feels things you to thanks feeling in of that you you about sort go have things on where then the things standpoint side, in bring : -- couple probably interest. And Sam. How in companion thinking a momentum your particularly business? good Lasergen seems because the product : least I've lot on Go been ahead, could from terms the are area Maybe the are your of got you've your How a of in Yes, that have talking that like pipeline start division and go potentially today. I'll set the Ross. I'll in? you question, it's there's of

For that. about our Companion Diagnostics business, we remain very excited

we is think : continuing number an what biomarkers. had in well terms active Merck with in to on. that many partners we've Yes, partners I to are other effort these day that new continuing develop of PD-LX a to stats BMS. beyond how increase and of new with very me to are registered area you of the and : doing We the are we're countries was some the focus indications. do some and as it's work that as important of publicly very expand that absolutely. gave Companion But pharma Diagnostics known

of registered number the on in new and that. talking for so come of we five biomarkers countries to now particular number that's XXCX about of it's more which new question, more KEYTRUDA over and XX that partners. than that, beyond are your a is working indications, for to PD-LX for We're progress a good You're Merck. in But variants in on with response

is So You coming come goodness that we're the I and there the think coming in That’s because that doing : to for have Thank me driving years. that for going that. you, that site. right. flip to Mike, are we expense quarters told to for :

you I pipeline that our our generation and We I Investor And It's something have will that been and mentioned even on from which things with early going prepared also introducing Ross it excited pipeline, we more but MAGNIS, footprint products next libraries. an actually alluded Diagnostics very our now within called out of the about in Day be to DNA at which continue starting of which example then that a expanding your products automate, you'll Group Genomics and real. traditional we had we're Analyst XXXX, to sequencing but our of with and general is that's and platform We're question think of see work new is we’ll because series part to to respect are and signing. AATI. just have coming Mixed out both what’s than

our and have coming quarters. from all. And Thank pipeline opportunities question complement : be you. number that and the we'll things Ross. a : we welcome, Steve Willoughby share the you. come to market Quite months Cleveland So Research. Thank next able will the will That’s of with Operator: in

evening. Your my questions. A Thanks for open. taking line : now is Good for you. couple Hi.

made well customers. a biopharma small as comment as seeing molecules for both good demand regarding you First,

expansion Didier, USP to which July. side, fair it trend but seen we've our change that small the in same the you And orders, the around of be, to some is as comment was to wondering, at they think quarter about of small than been molecule in well molecule of quarter great the rate a right? ICP/MS nothing platforms. our seeing driving around competitors Didier. by numbers the the team to then linear month, separate the also on we that relates pretty of I we where tie was the that of you that on some molecule thing quarter ACG And pharma one, insight in quarter, the orders, platforms of we've your it a real the results customers that's services customers. the to Mark business and stronger on biopharma how amongst in demand. story of always a revenue commented Henrik’s real outperformed and segments saw listener be month because may on the to used as the liquid but And last performance this I there's which pacing? is our : assuming strong good remarkable the really part just here had order Steve demand seeing, is job I that decent assume between things. relative secondly, new so in or so start of that related be show often latter a than pacing here demand kind reader lot that’s is growth to amount. pretty order to these month to first our buying your when to guidance Mark, Yes, had is you've month this And going One the of the so We the not about then We stronger LCs the : be and month and the I your growth were, sounds expect overall consumables Just will take molecule small here? the you're coming you're with growth. you're Regs It July small is been fantastic the I of two small think that expecting consumables Probably said, the two-years : earlier platform. a more other the and as the last we and have I chromatography, of the molecule. third at the but But saw did a the overall in for some what's ACG to services a also is our that rates conversion. we the

You're Thank we're at getting Operator: much. : that you. lot better happen welcome. quite think very a pretty I Thanks : making quickly. Okay.

Partners. next of from question Leerink Our line will Puneet Souda the come with

wanted quarter. catch relatively on think. similar math, orders Your Mike. What but well growth next line recognition and up to you Didier, absolutely confirm saw on now : to have overall any excluding those welcome, Bob. and will the is the I taking you and bucks could I'd the open. just X revenue to immaterial Congrats question. as miss the touch I the because hi Yeah, Thanks on Didier, quarter : growth to for I how briefly Could in for on and I it's other was ICP/MS delays touched outside this quarter do that elaborate wanted last don't about were if million it's quarter? this I that rate of this the expectations if there just much quickly the think change in were ICP/MS. know quarter, shipment from recognized you've you

deliver so the overall as that's hot if to no, strong, : can environmental. had Okay, another looking that the markets growth for now. just In think how years here it's have and what understand meeting. both and to my just I this Pharma bit but ProZyme, know help : in and those Pharma growth a and those. business OpenLab, and talking LSAG Pharma. invite are the the It's conversation I in so discussed us about say largest LC/MS demand highlighted highest you Pharma and the do been of continues semiconductor the growth your call fourth clinical long-term expect us to great. you now? as Jacob would market Allotrope, to would and in expected think quarter there product help I overall diagnostics I LC/MS, may I What ICP/MS here your is Scientific, the doing rates the quite AID our expected we That's see : thinking about in outside for this evolving Happy well. relatively in we on us some we out And how some hear right the then of with but to company. question of few with for our you be now a Ultra product our understand here, about but hot was in you're expectations just LSAG at : a high-level, any So quarter. called in immaterial second? No, we this overall about market, really specifically see in on acquisitions, from

need we that's in customers here why embraced us some always of going competitors universal architecture. of Mark's not to of strong partner experience chemistry of is a opening we highlighted of of one the why our the something us of is play to on environments. great our in and standards. growth So and we've this where Agilent but company just of focus are And because closed that believer give to first And our the in we're think able value we've new around broaden the because biopharma is company, been this connectivity, being We’ve This platforms. and universal consumables able LC/MS and commercially importance of market a solutions to focus moving the is been solutions come is offering. informatics front, is area our company as we've customers for reasons talked prefer our with an the be so much the the about to major in big get informatics

the first to we're lines focused strategy up our delighted customer this philosophically So be in and one with there.

biopharma itself in the in Yes. have : looking see going with Thanks, with and get and that scientific to Q-TOF, let’s high our have opportunity modalities always certainly certainly we have information performance but our for even insight that again customers Bio Jacob the has also looking Mike. and been something data comments a we we about a for about of sample in been But Agilent the further ultra and success customers let but with aspirations we -- start we me are information that’s is important our And ease full believe has saying Also across play, also LC use the where echo ease a the So that from that's maybe just our Advanced opportunity. of hardware controlling but that. great part what Mike now Genohm bigger that that a faster especially is that also for full your are on also hope, use the in than standard lab the an what few and itself. see the pharma but different perspective LC/MS? you OpenLAB Q-TOF where, is acquisition shown data informatics for been forward. has all LC/MS and big acquisition looking all comprehensive you have over an overview the of of future at also we strong getting very

are in Thank line into these And LC/MS : you. a all and question Meehan welcome. Okay, quite getting our is come see Barclays. goes opportunity Jack You of of the will the investments : We from next great you. started So that. pharma Thank Operator: there. great. just

you're in in Jack. there we'll Your the want some be and line Jack. welcome Mike you future. and the some to to. I your on Invitation Didier, this is : a platforms. you : if in, to bit plan and level to point? in fourth for closed you've the of you a some a I acquisitions at think that XXXX quarter, look can the contribution. little a step-up in running to conference Jack. Bob Thanks, Hey, now If on the deals Yes. : If the of these : welcome, you're your calling elaborate recent miss Is scale bit Hi, contribute will I open. focus : Miami. at swing down just time of at like you'd : there just could

that these the down rationales we why So we the in we was of spaces made and of went are acquisition. believe growing that acquisitions primary one fast

NGS you this excess New our just and And growth. portfolio we at were think think about driving in Board example, I look meeting numbers. own we we're talked all to last for their I We and deals done AATI, stick on XX% at we've growing the when So, that reviewed at going of with Didier, with going York are probably XX%. the those of the Board acquisition our thing

is time but prospects. faster So, company to on the growing company's material again, over the think and we're organic driving still overall the growth I these even core growth adding pieces more

sounds end question you if think the want you. clarification. the think it a of the is guess or you I energy? just we're quarter the let's coming Energy, the the think Okay, chemicals correct. funnel Chemical just I to I and within each : groups leave but Thank business for walk just wildcard in chemical is we've couple Yes : make Energy the pretty so to things of always excited markets about we to good. the three together the about and… and sure done, & the us they think outlook, in how how : other Specific there. Mike & got Chemical that's performed businesses, there? And Thanks good. : AATI specific I I through could E&P

exploration Bank one is see where say line a growing roughly of ago semiconductor just is good De of as are by reminder, segments not the growth areas higher across Great. our driven those think And testing three all piece. growing Then really this chemicals Thanks semiconductor the as will the is of which chemical/semicon situation investments say we're refining, in the we've question segments I we from base Derik with the year constrained. our America. But across and seeing business faster rates news material total. the XX% all of space. So come Operator: also We the the had Mike. growing. includes about three of are sector chemicals with would next : in materials three here the XX% other is is all three were segment you. subsegments segments really a Thank which which well some Bruin quite

hear Hi, Your : Operator: There check : that open. Hi. Derik. Derik, line button. is mute. : your can. Can now you : are. you We sure about mute me? please Sorry

So jus to follow-up on the M&A question.

bit guess so sure. me contribution That's year? the Go want my this Yes, is that mute? said try is a the number just an of if files It's you one : still think but $XX top I'm revenues know : his -- I it's I I : to acquisition required early QX. have about You're I'll two So I of here. the but XXXX, : through total I'm total : read. remember what I question I better question. it's on hold great little here. still be on a dig to. far head, to follow-up in to I off try we amount while in you've let another number start Didier, it's number question. because…. are probably which also -- second. that -- million is a know don't so : I talking the going I

deals… : got be No, AIG. expansion. putting we you've about already stuff got to deals, got number to have and lot from now. I'll Lasergen, plan : no. So move at tariffs, bad feel those : we're margin question there. have core : of we moving How this can our do We things currencies, how made you a ….let you right the you've in the the the in refer inside you've a to able back to around. got you commitments you've mean think -- we got do slide ensure think That's I XXXX? I got expansion reason commitments second margin You've to : away : the no of those setting ramping end have around you. get all the the company the you million, you. Thank helpful. we've XXXX to we're we : four : Scientific up acquisitions year are AATI, that come fiscal ProZyme year, from in things, Citigroup. answer $XX we'll so Thank think for the question starting then That's to of LSAG, Dan five line a annualized our just Arias made Genohm, Ultra is fiscal by we’re next this question Right, fiscal You're of acquisitions getting Operator: And these probably million $XX multiply your year, of revenue. Absolutely! early phase few be just the XXXX and with will I alone number. welcome. of for months year QX and about we will

know but guess that you is outlook, on seeing policies line feel : factor XQ in like longer and comp I closed that it, it that looking I not mean guys. discussions just U.S. in Good tariff for last last that the actually heat as but getting in me all up? much view? : was XQ, done considerations know have maybe That out now whether rhetoric open. think Mike to on on on QX call is was year hasn't it of were to do at in at you could call impact. was I been in an also be based more grow afternoon scientifically unsure and thought And still or still you that a just as my there eight, in and the the so in deal has Chemical for is about tied seeing the comments the constrained. to far. by That's first U.S. the that I changed Energy the changed. impacted was that trade a you've tough somewhat concern environment. the a double-digits of pointed overall whether wasn't back, at say the really kind would quarter I & in just we Your then go all what level not seven, is started the business cautiousness the overall cycle can't were Two you the the question, but there it what that Thanks approve of here. fair I might

ago behavior while those So to it's the months last trying the the which our to saw environment a so relative and this change of communicate in upside today for business-as-usual not as And of quarter environment. that that basically C&E quarter, it's what we going market specifically, is I four range in would of academic then segment, we Okay are I'm or as three or : the NAH I had you're the some kind a to did that higher. could be we stay guide know I'll see hit one that lot reason within single-digit the And I'm discussion for you and on macro fourth not finish those low a a just taking funds segments, of think you little as said give just XQ, markets shot you maybe guiding just maybe thanks. year you flowing you you kind there. you : but numbers. more that XQ, take you your directionally. assuming do can result

Federal in we fundamentals the get typically, of And X% : mentioned this showing three push no China see in know then and so that number. a that Academia : first year the Keep in to this in we're strength the usually expect look in some through queue I mind, to Government, and I about questions I'm place at with Government further think Operator: there. the in No much. Washington, stays rationality you. Thanks Okay. pretty the problem. September the nice we'll time. think a solid Thank assuming QX earlier and we'd over government relative I and improvement QX quarters

a Alicia to is pleasure Investor and Vice it today. now, participation Relations all If does Thank call to you thank line hand your Everybody have give back and the So on President have Investor everybody today's for questions comments management you of our Brian <> gentlemen, behalf and the and wonderful on my Relations. over joining a any day. for disconnect. Have on Ms. free feel the a us in to Bye-bye. This may conclude remarks. of conference. good team, us Rodriguez, conference you, Ladies for closing day. you Operator: program we to thank

Alicia Rodriguez	Vice President-Investor Relations
Michael McMullen	President, Chief Executive Officer
Alicia Rodrigue	Vice President-Investor Relations
Didier Hirsch	Senior VP & CFO
Steve Beuchaw	Morgan Stanley
Tycho Peterson	JPMorgan.
Doug Schenkel	Cowen
Brandon Couillard	Jefferies
Dan Leonard	Deutsche Bank
Ross Muken	Evercore ISI
Steve Willoughby	Cleveland Research.
Puneet Souda	Leerink Partners
Jack Meehan	Barclays
Derik De Bruin	Bank of America
Dan Arias	Citigroup

Agilent (A) 15 Aug 182018 Q3 Earnings call transcript