Agilent: worst may be over

<p>Agilent Technologies reported a $101 million loss Thursday as business continued to evaporate, including a 39 percent drop in orders at its Santa Rosa division, yet officials said Sonoma County’s largest tech employer may be through the worst of its global sales slump.</p><p>Orders for the company’s products are picking up in some sectors, senior executives said. Agilent, which laid off 300 workers last month at its Santa Rosa campus, said no more job cuts are planned.</p><p>Still, Agilent executives remained cautious in projecting when the company would hit bottom. They said the company should return to profitability a year from now.</p><p>“There’s some evidence out there, but we have no illusions that things are going to change rapidly,” said Bill Sullivan, Agilent president and chief executive. “In the second quarter, Agilent continued to deal aggressively with the effects of the severe global economic downturn.”</p><p>Revenues declined to $1.09 billion in the three-month period ending April 30, down 25 percent from a year ago. The company posted a loss of $101 million, or 29 cents per share. A year ago, it reported a profit of $173 million, or 47 cents per share, in the second quarter.</p><p>Business dropped even more sharply for its Santa Rosa-based Electronic Measurement Group, the company’s largest division. The unit reported sales fell 33 percent to $558 million, while orders tumbled 39 percent to $523 million.</p><p>The company continues to encounter weakness across all market sectors. Only aerospace and defense is showing some stability, while sales to the communications sector continued to fall sharply.</p><p>“It’s pretty broad, it’s pretty global. We’re not exactly sure what the bottom is,” said Ron Nersesian, who heads the Electronic Measurement Group.</p><p>With orders continuing to fall, the Santa Rosa group will suffer another sales decline during the current quarter. But it could break even by fall and register double-digit profits a year from now, Nersesian said.</p><p>The results were released after U.S. markets had closed. Its stock closed at $18.33 a share Thursday, up 28 cents on the New York Stock Exchange.</p><p>Agilent has been grappling with a sharp dropoff in sales that took hold in the fall and has continued so far this year.</p><p>“There are some indicators that our leading edge markets are about to trough,” Sullivan said.</p><p>Tentative signs that Agilent’s downturn could be near a bottom include strong sales in academic and government sectors and in food safety for bio-analytical measurement systems, Sullivan said.</p><p>“We have actually received orders from customers we have not heard from in months,” Sullivan said.</p><p>Encouraging signs for the Electronic Measurement Group include sales of wireless industry products used in research and development for cell phones and towers, and for making and installing wireless equipment.</p><p>In aerospace and defense, Agilent is developing surveillance technology for U.S. homeland security efforts and foreign governments.</p><p>“That coupled with the restructuring we’ve done will bring us back to profitability,” Nersesian said.</p><p>To accelerate Agilent’s turnaround, company officials said aggressive cost-cutting efforts were painful, but necessary.</p><p>Last month, Agilent announced it would lay off 300 workers in Santa Rosa and 2,400 in other parts of its global operations. The Santa Clara-based company has more than 19,000 workers worldwide.</p><p>Most of the layoffs will be made by the end of this year with some workers staying on through next April. No additional layoffs are planned, Nersesian said.</p><p>“There are no plans to change the numbers. We anticipate the economic situation sort of stabilizing just where it is,” he said.</p><p>Agilent, Sonoma County’s largest tech employer, will have 1,050 workers in Santa Rosa when the layoffs are completed. It employed 6,000 regular and temporary workers at its peak eight years ago, when the company had facilities in Santa Rosa and Rohnert Park.</p><p>“While our restructuring for our employees is very difficult, we are going to be in a very, very strong position,” Sullivan said.</p><p>Today, it has fewer than half the employees once housed at its sprawling 190-acre Fountaingrove campus. But it has no plans to leave Santa Rosa, Nersesian said. Agilent invested $50 million to upgrade the 700,000-square-foot facility in 2006, turning the once cramped space into an R&D center with ample meeting rooms, break areas and auditoriums.</p><p>“We’re not planning to move at all,” Nersesian said.</p>