These two will survive & prosper

Article Excerpt

Agilent and Verigy are leaders in two tech niches. The recession has hurt both companies, but their strong balance sheets and tightly controlled costs should help them survive. Meanwhile, their high research spending will let them keep developing new products. This will pay off in sales and earnings gains when the economy improves. AGILENT TECHNOLOGIES INC. $16 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 345.3 million; Market cap: $5.5 billion; Price-to-sales ratio: 0.2; WSSF Rating: Average) makes testing systems that help electronics manufacturers improve the quality of their products. Agilent also makes measurement equipment for medical research labs and drug companies. Demand for Agilent’s medical-related products remains steady, but the recession has hurt sales of cellphones and other electronic devices. As a result, manufacturers are spending less on the company’s testing equipment. In response, Agilent plans to drop some of its businesses and shrink its workforce by 3%. The company expects to pay $100 million in…