Big purchase keeps paying off

Article Excerpt

AGILENT TECHNOLOGIES INC. $33 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 348.1 million; Market cap: $11.5 billion; Price-to-sales ratio: 1.7; No dividends paid; TSINetwork Rating: Average; www.agilent.com) paid $1.5 billion for Varian Inc. in May 2010. This company makes testing equipment for medical-research labs. Demand for this equipment is less cyclical than Agilent’s electronic-testing products, so adding Varian cuts Agilent’s risk. Thanks mainly to Varian, Agilent’s revenue rose 22.2% in the three months ended July 31, 2011, to $1.7 billion from $1.4 billion a year earlier. Agilent earned $276 million, or $0.77 a share, up 44.5% from $191 million, or $0.54 a share. These figures exclude unusual items, such as costs to integrate Varian. The slowing economy could dampen Agilent’s growth. However, the company continues to spend around 10% of its revenue on research. This should give it a steady stream of new products to fuel its sales. As well, Agilent’s long-term debt of $2.2 billion…