Agilent Technologies' Santa Rosa-based electronic measurement business posted its most profitable quarter in history Tuesday, powered by demand for ever-more sophisticated smartphones.
Sales of wireless test equipment produced by Sonoma County's largest high-tech company jumped 50 percent last quarter, said Ron Nersesian, who heads the Santa Rosa division.
"I don't think we're going to see that take a pause," he told Wall Street analysts Tuesday.
While many local companies are still struggling to gain traction, the year-end financial results showed Agilent has clearly emerged from the recession.
On Tuesday, Nersesian said employees in its measurement unit will get a minimum 14 percent bonus next month, a windfall based on their strong second-half performance.
"In this economy, I think that's a good deal," he said.
Agilent has about 1,150 employees in Santa Rosa, mostly in the measurement group. The division has 8,000 workers worldwide.
The unit, which accounts for almost half of the company's revenues, reported $855 million in sales for the fourth quarter ended Oct. 31. That was up 12 percent from the same period a year ago.
Overall, Agilent ended its fiscal year with a record $6.6 billion in companywide sales, up 22 percent from 2010.
"It was an excellent year for Agilent," said CEO Bill Sullivan. "We delivered the best operating performance in our history."
The Santa Clara-based technology company was spun off from Hewlett-Packard in 1999.
It took a hit during the recession, as cash-strapped consumers stopped buying the latest electronics.
In 2009, the company cut salaries and laid off 300 workers in Santa Rosa. Companywide, Agilent lost $31 million that year.
But the measurement group's business started to bounce back in 2010, especially in Asia, where most of the world's electronics are manufactured.
Today's high-powered "3G" smartphones will soon be replaced by next-generation "4G" models, requiring a new generation of test equipment, Nersesian said Tuesday.
"We're seeing a race toward 4G," told analysts.
As a result, the measurement group faced a $200 million backlog of orders last year.
Most of Agilent's growth is coming from emerging markets, including China, India, Brazil and Russia. In the fourth quarter, Asia made up 44 percent of the measurement group's revenue.
The unit is gearing up to meet the demand, but it hasn't hired back most of the employees laid off two years ago, when global employment fell from 11,000 to 8,000.
Its Santa Rosa operation is still just a quarter of the size it was a decade ago, when it employed 5,300 people in Sonoma County.
"We've been very disciplined not to add people on the upswing," Nersesian told analysts. "That's allowed us to deliver higher operating margins."
In the fourth quarter, the Santa Rosa division's operating margin was 24 percent of revenue, the highest in company history.
The Santa Rosa unit posted $3.3 billion in annual sales, its second straight yearly increase.
Companywide, Agilent reported quarterly earnings of $289 million, and $1 billion for the full year.
Agilent shares fell in after-hours trading after the company's first-quarter earnings forecast came in short of analysts' outlook.