Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| And if you look at our clinical business in NASD, it's growing very nicely year-over-year |
| And I think that's one of the benefits that Agilent has is this broad portfolio of being able to apply our technologies to six end markets |
| I think our team has done a good job |
| And I think given our presence in China and the fact that we have the ability to not only provide a product that can be sourced from outside China, but also locally-sourced, we have the broadest portfolio, and I think that serves us well |
| But certainly, we're very pleased with the performance that we had in small molecule |
| And I think the science is proving that and so we're very bullish about that opportunity |
| And so that's why we're still positive about the long-term aspect here |
| Our small molecule business in China actually performed better than the rest of the world, still down, but it speaks to kind of some of the resilience in that market |
| Both the number of programs, number of molecules as well as revenue dollars and I think that bodes well for future demand |
| And so that's pretty exciting for us and we are still -- we view ourselves as the gold standard of GMP-grade siRNA |
| I would take that as, hey, we've got a very strong balance sheet, strong cash flow, and we're in a better position than maybe some of our peers, maybe not the giants, but many of our peers |
| Maybe just unpack a little like what was it that was better? And kind of do you expect that business to continue to improve implicit in your guidance? Robert McMahon Yes, it's a great question and we were very pleased with our China team being able to really deliver in a challenging market condition |
| So, that gives us confidence that, hey, we've had probably three quarters in a row being able to call the number |
| And it actually performed better than what we expected |
| If you take that piece out of the installation side of our ACG business, our contract business grew double-digits and our on-demand or break/fix grew mid-single |
| I think what we've demonstrated, actually, in a very challenging year last year was actually we were able to continue to improve our margins despite a lower-than-expected top line growth |
| Again, we're still expecting to decline this year, mid-single-digits, but we're certainly starting off better than what we had planned |
| That benefits our business over time |
| But even if we looked at Q1 as an example, Advanced Materials grew -- or performed much better, I would say, than the Chemical side |
| And 50 to 100 basis points of margin expansion |
| It was nice growth sequentially, but also grew year-over-year |
| Yes, I mean we talked about China actually on a year-over-year basis, actually performed better than the rest of the world that I would say they're over-indexed to small molecule, and I don't want to call it being kind of a canary in the coal mine, so to speak |
| And then our expectation is that things are going to get better, somewhat a function of comparisons, but then also a recovery, particularly in the pharma area in the second half of the year |
| China is stable, which is a positive |
| And -- but we're much more optimistic about the Advanced Materials given the secular nature of some of the actions that we're seeing not only in our customers, but government is driving in terms of investment in those areas |
| But I do think you're seeing a stability on a monthly basis in China, which gives us confidence that maybe we've hit this bottom and then getting ready to reflect or inflect sometime in the future |
| But the first half played out really well for us |
| Let's talk about our strategy of actually getting more on contract and as we get more of our installed base on contract, each one points $30 million of annual incremental revenue that actually increases our weighted average because we think that ACG over time is a high single-digit grower |
| Other folks maybe like yourself, you're also talking about an organic improvement |
| Bottom-line, we're still -- we still believe in those numbers, 5% to 7% on the top line and 50 to 100 basis points of improvement in margin |
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| The business, I think, was down, correct if I'm wrong, 9% in the fiscal first quarter |
| Pharma was about where we expected it to be, which was down about 22% |
| And I do think that -- there's probably still -- in China, biotech is probably still going to be challenged |
| For those who listen to our guidance at the beginning of our fiscal year for Q1, we're expecting actually China to be down about 20% -- or mid-20s, I would say |
| And we are -- I would say, remain cautious about that side until we see actually a turnaround |
| You expressed confidence in seeing signs of improvement, I think biotech was still weak |
| Q1 was a little lower than that, I would say, maybe we're towards the end, and then we're not calling an inflection yet, but it's still builds on that thesis that we're talking about |
| So, you were thinking down low 20s, it came in down 9% |
| So, 2023 certainly had its challenges |
| Daniel Brennan So, Chemical and Advanced Materials, not CME, that was a segment that when the economy has gotten weaker in the past, it's been like a -- certainly a risk for you guys, but you've had this benefit of these Advanced Materials business is doing really well right now PFAS, electric batteries, right? But the business has slowed, right? I mean you're going from 18% growth in fiscal 2022 |
| Daniel Brennan Right and then we hosted one of your competitors up here today on pharma and they -- I believe you talked about biotech in China was down 50% in the first quarter, correct me if I'm wrong |
| people think this could get a lot -- this could certainly get worse |
| I know that there were a lot of people thinking that China was going to disappear off the face of the map for duals companies and I think what we've seen is a stabilization |
| And we're still expecting China to be down about mid-single-digits for this year, but exiting at a rate to go -- to return to growth in 2025 |
| And we certainly are going to miss Mike |
| So, are you seeing, just given where the numbers are, are you beginning to see a bottoming out in the pharma, just like how do you like--? Robert McMahon We have seen a bottoming out and I think that speaks to down 20% |
| Daniel Brennan So, maybe just on the global biopharma, you kind of lowered your growth rate a little bit for the year |
| Local competition can't match that |
| I would say the difference between the 18 and the 3 was largely on the chemical side, which was in China last year, which had seen lower growth |
| And quite honestly, the local competition, while getting better is not where they need to be, particularly at the high end |
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