By Pratik Jain
(Reuters) – Medical equipment maker Agilent Technologies cut annual profit and sales forecasts for a second straight quarter as demand stays soft in major market China due to a slow economic recovery.
Agilent expects full-year revenue to be between $6.80 billion and $6.85 billion, compared with $6.93 billion to $7.03 billion projected earlier.
It expects annual adjusted profit per share between $5.40 and $5.43, compared with its prior forecast of $5.60 to $5.65.
“In July, we saw a further (sales) deterioration in China, resulting in the 17% decline for the quarter,” CFO Robert McMahon said in a post-earnings call.
“While the Q3 decline in China was centered in pharma, which was down 30%, we did see weakness in other end markets as well. We expect the conditions we’ve seen in July to persist in China for Q4.”
For the third quarter ended July 31, the company’s total sales fell 2.7% to $1.67 billion.
Sales from its third-largest segment that offers genetic sequencing, contract manufacturing, research and development, among others, were $349 million, missing a Refinitiv estimate of $355.67 million.
The sales miss was due to softness in genomics and the shutdown of its Resolution Bioscience business, which offered next-generation sequencing-based cancer diagnostics solutions.
The company said on Tuesday it has taken a $291 million pre-tax charge in the quarter associated with the shutdown and expects the wind-down to continue through the fourth quarter and into early fiscal 2024.
Agilent CEO Mike McMullen flagged performance of its largest unit that provides laboratory instruments, consumables and software continues to be affected by the market environment in China.
“Our sales funnel remains healthy and are up year-on-year, but deal velocity continues to slow as customers remain cautious in making capital purchases,” McMullen added.
Its quarterly adjusted profit per share was $1.43, above expectations of $1.36.
(Reporting by Pratik Jain in Bengaluru; Editing by Shilpi Majumdar)
