AGILENT TECHNOLOGIES INC. $46 - New York symbol A

AGILENT TECHNOLOGIES INC. $46 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 345.0 million; Market cap: $15.9 billion; Price-to-sales ratio: 2.3; Dividend yield: 1.0%; TSINetwork Rating: Average; www.agilent.com) makes testing systems that help electronics firms improve their products. It also manufactures testing gear for medical research labs. Agilent was a unit of Hewlett-Packard until 1999, when Hewlett spun it off as a separate firm.

Agilent earned $269 million in its fiscal 2013 second quarter, which ended April 30, 2013. That’s down 2.2% from $275 million a year earlier. Due to fewer shares outstanding, earnings per share fell 1.3%, to $0.77 from $0.78.

Revenue was flat at $1.7 billion. Mobile phone makers bought less testing equipment. However, medical equipment sales benefited from last year’s $2.2- billion purchase of Dako, a Denmark-based firm whose products detect cancer.

Agilent is now cutting 2% of its workforce. That should lower its costs by $50 million a year.

Without severance and other restructuring costs, Agilent expects to earn $2.70 to $2.85 a share for all of fiscal 2013. The stock trades at 16.6 times the midpoint of that range. That’s still a reasonable p/e ratio in light of Agilent’s high research spending, which amounted to 10.5% of its revenue in the latest quarter. The $0.48 dividend yields 1.0%.

Agilent is a buy.

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