Agilent Technologies (A) is expected to report Q3 earnings Thursday Aug. 14 after the bell, with a conference call scheduled for 4:30 pm ET.
The consensus estimate is 54c for EPS and $1.47B for revenue, according to First Call. On its last earnings call the company provided Q3 guidance of 52 to 56c in EPS and FY08 guidance of $2.07 to $2.15. Commentary at the time from the CEO was, "We continue to anticipate tough conditions in U.S. markets and mixed conditions in Europe and Japan, while Asian markets are expected to remain quite robust."
Goldman expects Agilent to report solid Q3 operating earnings of 55c, at the higher-end of guidance. The firm believes there could be confusion in the market on the initial release, as Agilent is making the transition to reporting EPS including employee stock options, and will accordingly report Q3 and provide guidance on both bases. Previously, Agilent had reported operating EPS excluding ESO, which has historically been at 4c to 5c per quarter. Goldman expects underlying operating results to show the value of Agilent's diverse portfolio, both end-markets and geographic, also the resiliency of Agilent's operating model.
Goldman says end-market trends are unlikely to surprise, with areas of strength including wireless R&D, food safety, Olympics, and petrochemical. In terms of potential areas of concern, Goldman believes investors will look for gross margin pressure in Electronic Measurement, ongoing computer/semi weakness, and signs of slowing in emerging markets, which is unlikely in our view.
Although Goldman expects generally upbeat operating results, they still remain on the sidelines in Agilent shares ahead of the quarter, due to potential headline risk around the options expense transition.