Topic: Growth Stocks

Tech stocks: Varian acquisition pushes up Agilent earnings

Agilent Technologies Inc., symbol A on New York, makes testing systems that improve electronic products, such as cellphones and networking equipment.

In May 2010, Agilent bought Varian Inc. for $1.5 billion. Varian makes a wide range of medical and drug-testing equipment, such as mass spectrometers that detect and measure substances in the blood and other samples. Medical-equipment demand is less cyclical than testing products, so this move cuts the tech stock’s risk.

Thanks to Varian, Agilent earned $200.0 million, or $0.56 a share, in the three months ended April 30, 2011. That’s up 85.2% from $108.0 million, or $0.31 a share, a year earlier. These figures include restructuring costs and expenses related to integrating Varian. The tech stock’s revenue jumped 31.9%, to $1.7 billion from $1.3 billion. The company spends around 10% of its revenue on research and development.

Agilent holds cash of $3.0 billion, or $8.55 a share. The tech stock’s $2.1 billion of long-term debt is only 12% of its $17.1-billion market cap.

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