Agilent reports third quarter results
The company has invested much time and effort in implementing a new enterprise resource planning (ERP) system which controls 50% of Agilent s volume and virtually all of its financial processes. Early difficulties with the new system have cost the company valuable production time.
”The good news is that, at this point, we believe the ERP implementation is stable, and we are confident we can meet anticipated customer requirements,” said chief executive Ned Barnholt. “Unfortunately, during the quarter we lost roughly a week s worth of normal production because of unexpected difficulties ramping the system, or roughly $105 million in revenues and $70 million in operating profits."
Barnholt noted that total net orders were 10% above one year ago despite the ERP-related difficulties and, after adjusting for that impact, were about flat with second quarter levels. Order cancellations were stable again in the third quarter at about $90 million and well below last year s $240 million.
Agilent’s Test and Measurement division reported revenues of $802 million, down from the previous quarter s $814 million. Much of this was related to the ERP problems, without which revenues would have been flat sequentially. Operating losses widened to $279 million from $218 million in the second quarter.
The Semiconductor Products division also suffered from the ERP system roll-out problems with revenues up to $390 million from $371 in the previous quarter, but $30 million lower than the year ago quarter. The reported loss for the division was $24 million compared to $26 million in the second quarter. Without the ERP related problems, the loss would have been reduced to $19 million. The Semiconductor Products division’s book-to-bill ratio remained above 1.0 for the third consecutive quarter.
