Agilent Technologies A reported fourth-quarter fiscal 2021 earnings of $1.21 per share, beating the Zacks Consensus Estimate by 3.4%. The bottom line improved 23% year over year and 10%, sequentially.

Revenues of $1.66 billion came ahead of the Zacks Consensus Estimate of $1.65 billion. The top line was up 12% on a reported basis and 11% on a core basis from the year-ago quarter’s number. In addition, the figure increased 4.7% from the previous quarter’s level.

Top-line growth was driven by strong growth across Americas and China. Also, a robust performance delivered by all the operating segments contributed well.

Solid momentum across the Analytical Laboratory market, which grew 11% year over year and accounted for 85% of the total revenues, aided the results. Strong performance in the pharma and biotech, and chemical and energy, accelerated revenue growth in this end-market.

Additionally, Agilent witnessed 11% year over year growth in revenues generated by the diagnostic (Dx) and clinical end market (15% of total revenues). Higher diagnostic demand and strength in A’s cell analysis and mass spectrometry businesses drove the top line in this market.

Agilent Technologies, Inc. Price, Consensus and EPS Surprise

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Segments in Detail

Agilent has three reporting segments, namely Life Sciences & Applied Markets Group (LSAG), Agilent Cross Lab Group (ACG), and Diagnostics and Genomics Group (DGG).

LSAG: The segment accounted for $747 million or 45% of its total revenues, up 11% year over year. This outperformance was driven by a solid momentum across pharma, and chemical and energy markets. Also, strength in cell analysis, liquid chromatography and mass spectrometry platforms aided the results.

ACG: Revenues from the segment were $572 million, accounting for 34% of total revenues. Also, the top line improved 10% year over year, driven by strong growth in consumables revenues. Also, growing momentum among the contract and on-demand services contributed well.

DGG: Revenues increased 16% year over year to $341 million, accounting for the remaining 21% of total revenues. Top-line growth was driven by solid demand for genomics instrumentation and strength in Cancer Dx.

Operating Results

For the fiscal fourth quarter, the gross margin in the LSAG segment expanded 20 basis points (bps) on a year-over-year basis to 59.4%.

DGG gross margin expanded 160 bps on a year-over-year basis to 52.5%. Further, ACG gross margin expanded 160 bps to 53.4%.

Research & development costs were $116 million, up 13.7% year over year. As a percentage of revenues, the figure expanded 10 bps year over year.

Selling, general & administrative expenses were $389 million, which inched up 0.5% year over year. As a percentage of revenues, the figure contracted 270 bps year over year.

Operating margin for the fiscal fourth quarter was 23.7%, which expanded 350 bps on a year-over-year basis.

Segment-wise, the operating margin for LSAG expanded 180 bps year over year to 26.6%. The DGG segment’s operating margin expanded 50 bps on a year-over-year basis to 20.8%. ACG operating margin was 29.9%, which expanded 220 bps from the year-ago quarter’s level.