Agilent Technologies report a 20 per cent drop in its first quarter profit as a healthy revenue growth is offset by restructuring, higher stock-based compensation costs and other expenses.
The scientific equipment maker has also had to contend with volatile pharma and biotech markets in the US, in contrast to the sustained strength that is characterising the Asian market.
Agilent chief executive Bill Sullivan forecasted some slowing, mainly in the US markets, but said the company was "comfortable" with the range of analysts' estimates for fiscal 2008 revenue and adjusted net income per share.
Agilent had appeared to be on the up after it recently settled patent infringement with Invitrogen concerning tools used in complementary DNA synthesis, polymerase chain reaction (PCR) and other molecular biology applications.
However, its Q1 results make for disappointing reading as net income was $120m, for the three months ended 31 January, compared with $150m for last year's quarter.
Excluding restructuring, stock-option, tax and other charges, the company posted an adjusted profit of $160m, compared with an adjusted $162m, for the prior-year period.
Revenue was $1.39bn - up 8.8 per cent from $1.28bn from this time last year.
Commenting on Agilent segment performance Sullivan said: "Bio-Analytical markets showed sustained momentum, with segment orders up 20 per cent and revenues up 15 per cent. Demand remains robust in both life sciences and chemical analysis markets, and across all geographies."
Agilent's products, which also include data generators, multimeters and oscilloscopes, fared well as bioanalytical revenue increased 15 per cent, helped by a 20 per cent jump in orders.
Revenue in electronic measurement unit jumped 5 per cent as orders climbed 8 per cent. Revenue in the life sciences unit, which makes laboratory equipment and other scientific instruments, rose 24 per cent, or 11 per cent excluding the impact of Agilent's Stratagene acquisition in June.
In purchasing Strategene, Agilent finally got hold of reagents needed to develop new tools. However, it also took on and finally settled long running litigation with Invitrogen that stretched as far back as June 2000.
The terms of the agreement saw Agilent make an undisclosed payment to Invitrogen. In return, Agilent will stop sale of its RNase H minus reverse transcriptase products. Invitrogen will also take out a license from Agilent for its DNA polymerase blend products and pay royalty fees, also undisclosed. For more details see this article .
Looking ahead to 2008, Agilent expect for second quarter of 2008, to achieve revenues in the range of $1.40bn to $1.45bn, up 6 per cent to 10 per cent from last year.