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Agilent (A) Gears Up for Q2 Earnings: What's in the Cards?

Zacks Equity Research

Agilent Technologies A is set to report fiscal second-quarter 2020 results on May 21. In the last reported quarter, the company delivered in-line results.

The stock outperformed earnings estimates twice, matched once and missed on another occasion in the last four quarters, with the average positive surprise being 1.9%.

Trend in Estimate Revision

For the fiscal second quarter, the Zacks Consensus Estimate for earnings has declined 7.9% to 58 cents per share over the past 30 days. This indicates a decline of 18.3% from the year-ago reported figure.

The consensus mark for revenues is pegged at $1.18 billion, implying a decline of 4.97% from the year-ago reported figure.

Let’s see how things have shaped up for this announcement.

Agilent Technologies, Inc. Price and EPS Surprise

 

Agilent Technologies, Inc. Price and EPS Surprise

Agilent Technologies, Inc. price-eps-surprise | Agilent Technologies, Inc. Quote

Factors to Note

The company’s fiscal second-quarter sales might have been affected by the global coronavirus-led economic crisis. It faced disruptions in manufacturing operations, which may have further impacted top-line growth.

Last month, the company stated that although its fiscal second-quarter revenues grew 2% (up 1% on a core basis) through March, it witnessed significant disruptions in business activities in late March, particularly in the United States and Europe. Customers have either closed or restricted access to Agilent’s facilities in a bid to slow the virus spread.

The company is taking all the necessary steps to reduce expenses and protect the safety, health, and well being of employees and customers.

Its expanding product portfolio should have been a key growth driver. The acquisition of BioTek Instruments should have served as a tailwind for Agilent in the quarter.

The deal is expected to have expanded the Cell Analysis business and aided top-line growth.

In addition, the companys Diagnostics and Genomics Group (DGG) is expected to have performed well in the to-be-reported quarter, driven by growth in pharma, as well as strength in genomics.

Agilent expanded its share in next-gen sequencing, which is expected to have driven the top line in the pathology business. Also, growth of the API business should have contributed to top-line growth in the quarter.

The company’s focus on aligning investments toward more attractive growth avenues and innovative product launches is expected to have aided its performance.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Agilent this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below.

Earnings ESP: The company has an Earnings ESP of -18.74%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Agilent has a Zacks Rank #3.

Stocks That Warrant a Look

Here are a few stocks worth considering, as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

NVIDIA Corporation NVDA has an Earnings ESP of +0.15% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shopify Inc. SHOP has an Earnings ESP of +33.18% and a Zacks Rank #2.

CrowdStrike Holdings Inc. CRWD has an Earnings ESP of +3.57% and holds a Zacks Rank of 2.

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