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Investing.com -- Agilent Technologies (NYSE:A) rose more than 5% in pre-market trading Thursday after reporting fiscal second-quarter results that beat expectations and maintaining its full-year adjusted earnings guidance, despite margin pressure from tariffs and uneven demand across end markets.
Revenue for the quarter was $1.67 billion, ahead of the $1.63 billion consensus.
Organic growth reached 5.3%, exceeding the guided range of 2.5% to 5%. Adjusted EPS also surpassed expectations.
Analysts at TD Cowen said the performance was aided by pull-forwards ahead of the U.S.-China tariffs, though shipping delays at ports offset the timing impact, resulting in a clean beat.
China revenue rose 10%, ahead of internal estimates. Life Sciences and Diagnostics met expectations, while Cross Labs and Applied Markets outperformed.
Food and diagnostics led the segment beat, with academic and government, chemical and applied markets, and forensics and environmental also ahead.
The environmental business rose 6%, driven by 75% growth in PFAS testing, according to TD Cowen.
Barclays (LON:BARC) noted that strong PFAS demand came largely from U.S. industrial wastewater testing, supported by international growth.
However, possible U.S. regulatory rollbacks could dampen that momentum looking ahead to 2026.
Agilent maintained its full-year adjusted EPS guidance. According to BofA Securities, the company is offsetting the $60 million tariff-related headwind through price actions, supply chain moves, and localized manufacturing.
A second phase of mitigation is prepared to address another $40 million impact if the U.S. implements a 50% tariff on European Union goods in July.
Agilent’s book-to-bill ratio remained above 1.0x, with order growth in the low-single digits. Liquid chromatography performed well, while biopharma rose 6%, slightly below internal expectations.
Academic and government spending remained weak, and management now forecasts a 20% decline in the U.S. A&G for the full year, compared with a 9% drop in Q2.
Margins were pressured by tariff mitigation costs, falling 55 basis points in the quarter.
The company expects fiscal 2025 margins to be flat year-over-year but anticipates a step-up in 2026 once supply chain changes take full effect. BofA said the company plans to continue these changes even if tariffs are reversed.
Wolfe Research estimated $0.05 in EPS upside from foreign exchange and product mix, including strength in LC and stack platforms.
Wolfe noted the short duration of Q2 tariffs likely limited their financial impact but warned of potential demand pull-forward and a possible FY guide cut.
It flagged a $35 million organic revenue risk from Agilent’s A&G outlook, which remains flat, versus steeper declines projected by peers.
Barclays maintained an “equal weight” rating with a $115 target, stating the outlook appears achievable but not conservative. BofA reiterated a “neutral” rating and $128 price objective, citing limited visibility into market recovery.
TD Cowen said the company demonstrated operational discipline under newly appointed CEO Padraig McDonnell, noting that Q2 marks two consecutive quarters of execution above expectations.