Agilent cutting 4,000 jobs

The Associated Press
Tuesday August 21, 2001

SAN JOSE — Agilent Technologies Inc., a maker of test and measurement equipment, reported a third-quarter loss that was narrower than Wall Street had expected but said Monday it is slashing 4,000 jobs because business is expected to stay sluggish for quite some time. 

Officials also warned that fourth-quarter revenue and earnings will fall short of analysts’ expectations. Investors responded by sending shares down 9 percent in after-hours trading. 

The job cuts amount to 9 percent of Agilent’s worldwide work force of 43,000. The move follows the company’s decision in April to cut all employees’ pay by 10 percent in hopes of avoiding layoffs. 

Since then, demand for Agilent’s products for the communications and semiconductor industries has remained weak, with a recovery expected to be “slow and gradual,” chief executive Ned Barnholt said. 

“This decision is one we don’t make lightly,” Barnholt said. “This is by far the worst industry downturn I’ve seen in my 34 years with the company.” 

Palo Alto-based Agilent was spun off from Hewlett-Packard Co. in 1999. 

Agilent said the job cuts – which will be imposed by the middle of next year – will save the company about $500 million a year. The company will take a $200 million restructuring charge to account for its layoffs. 

In the quarter that ended July 31, Agilent reported a net loss of $219 million, or 48 cents per share, compared with a profit of $155 million, or 34 cents per share, a year ago. Revenue fell 23 percent, to $1.8 billion from $2.4 billion. 

Excluding one-time charges, Agilent said its operating loss was $109 million, or 24 cents a share. The average estimate from analysts was for a loss of 35 cents a share, according to Thomson Financial/First Call. 

Agilent said it was plagued by a combination of excess capacity and weak demand in the industries it serves. About half of the job cuts will come in manufacturing, Agilent executives said in a conference call. 

The company registered $1.3 billion in orders in the quarter, but about $240 million worth of orders were canceled. Even so, Barnholt said Agilent still generated positive cash flow and will be nearly debt-free by the end of this month. 

Barnholt also said revenue in the current quarter should be between $1.3 billion and $1.5 billion, with the company’s loss widening to between 50 cents and 70 per share, excluding charges. Analysts had been forecasting a loss of 17 cents per share, on revenue of almost $1.8 billion. 


Barnholt said the company appeared to be “bouncing along the bottom.” The mandatory 10 percent pay cut for Agilent’s remaining employees will end on Oct. 31. 

“We do believe the turnaround is going to come,” Barnholt added. “It’s just hard to tell when it’s going to happen.” 

Agilent shares fell 36 cents to $26.09 on the New York Stock Exchange before the earnings report. In extended trading, the stock fell $2.34, nearly 9 percent, to $23.75. 

In the first nine months of the year, Agilent earned $31 million, or 7 cents per share, on revenue of $6.7 billion. In the comparable period last year, the company earned $452 million, of $1 per share, on $6.3 billion in sales. 


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