Agilent Technologies, Inc.

Good day, ladies and gentlemen, and welcome to Agilent Technologies' fourth quarter of a 2018 earnings conference call. At this time, all lines are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be provided at that time. Should anyone require operator assistance during today's call, please press star and then zero on your touchtone telephone. And as a reminder, this conference is being recorded for replay purposes. I would now like to hand the conference over to Alicia Rodriguez, Vice President of Investor Relations. Please go ahead.

Thank you, James, and welcome everyone to Agilent's fourth quarter conference call for fiscal year 2018. With me are Mike McMullen, Agilent's president and CEO, and Bob McMahon, Agilent's senior vice president and CFO. Joining in the Q&A after Bob's comments will be Jacob Tyson, president of Agilent's Life Science and Applied Markets Group, Sam Raha, president of Agilent's Diagnostics and Genomics Group, and Mark Doak, president of the Agilent CrossLab Group. You can find the press release and information to supplement today's discussion on our website at www.investor.agilent.com. While there, please click on the link for financial results under the financial information tab. You will find an investor presentation along with revenue breakouts and currency impacts, business segment results, and historical financials for Agilent's operations. We will also post a copy of the prepared remarks following this call. Today's comments by Mike and Bob will refer to non-GAAP financial measures. You will find the most directly comparable GAAP financial metrics and reconciliations on our website. Unless otherwise noted, all references to increases or decreases in financial metrics are year over year. References to revenue growth are on a core basis. Core revenue growth excludes the impact of currency and acquisitions and divestitures within the past 12 months. Guidance is based on exchange rates as of October 31st. We will also make forward-looking statements about the financial performance of the company. These statements are subject to risks and uncertainties and are only valid as of today. The company assumes no obligation to update them. Please look at the company's recent SEC filings for a more complete picture of our risks and other factors. Before I turn the call over to Mike, I would also like to share my plans to retire at the end of January and making this my last conference call as Agilent's Vice President of Investor Relations. I've enjoyed working with many of you over the years, but as Mike says, the best is yet to come, and so it is also true for IR. And now I'd like to turn the call over to Mike.

Well, thanks, Alicia. And hello, everyone. Thank you for joining us today. Before I cover our financial results, I want to thank Alicia for her years of service and wish her the best in her retirement. Alicia has superbly led Agilent's IR team for the past eight years. She has set a high standard for her professionalism, integrity, and transparency in her engagement with the investment community. Thank you, Alicia. You are the best, and will be missed by me. You can see it's a bit of an emotional day for all of us and our Agilent team, and I'm sure by the audience on today's call. This quarter, we are reporting our strongest quarterly results since the 2015 launch of the new Agilent. We are ending the year with a terrific quarter. Our revenues, profitability, and earnings per share are significantly ahead of expectations. Now, some of the specifics. Q4 revenues grew 9% on a core basis to $1.29 billion. This exceeded the high end of our guidance by more than $30 million. Double-digit end-market growth in pharma, environmental forensics, along with continued strength in our chemical and energy business are driving results. Geographically, our China business is up sharply with 16% growth for the quarter. For the year, the Ashland China team delivered double-digit growth and achieved a major milestone, crossing over $1 billion in business for the first time. Q4 adjusted operating margin is 25.2%, up 190 basis points from last year. This is our 15th consecutive quarter of the Ashland team improving year-over-year operating margins. Q4 adjusted EPS of $0.81 is $0.07 above the high end of our guidance. Compared to last year, this is an increase of 21%. In addition, we took advantage of marketing conditions to purchase $86 million in stock during the quarter. For the full year, stock repurchases stand at $422 million, underscoring the confidence we have in our future performance. I am also pleased to report that the Agilent Board has just approved a new $1.75 billion share repurchase plan. This quarter, performance caps off an excellent 2018. Our strong quarterly performance translates into full-year core growth of 7.1%. Our highest annual growth rate since the launch of the new Agilent. Total reported revenues grew to $4.9 billion. We continue to deliver improved profitability while investing for growth. For the year, Adjusted operating margin is 23.1%, up 110 basis points over last year. Our earnings per share are up 18% for the year to $2.79. The numbers tell the story. A strong team delivering yet another stellar annual performance. Let's now look at the quarter by business groups. Core revenue grew a healthy 9% for LSAG, our life science applied markets group. Product strength is broad-based driven by mass spec, chromatography, and cell analysis. We continue to introduce innovative new products. We are strengthening our molecular spectroscopy portfolio with the launch of the Agilent 8700 laser direct infrared chemical imaging system. This is a breakthrough in both chemical imaging and spectral analysis. We also introduced the CARI 3500 UV-Vis system. the first significant advancement in UV-Vis architecture in decades. We continue to build out our cell analysis business. We just closed the acquisition of ASEA Bioscience. ASEA is a provider of cutting-edge cell analysis instruments and will expand our cell analysis portfolio. The Ashland Cross-Live Group delivered strong 9% core revenue growth. Demand was excellent across both services and consumables. We continue to invest in our portfolio and extend our customer reach. We completed the acquisition of Prozyme, expanding our offering in the biopharma marketplace. We also acquired our South Korean distributor. This acquisition expands our direct customer engagement and further builds out ACG's service business in the market. The diagnosing genomics group grew 5% on a core basis. Strength in our NASD and genomics businesses drove the quarterly results. In a significant win, Agilent has been selected by Unilabs to be a preferred partner for the pathology business. Unilabs is one of the largest European diagnostic testing lab providers. This announcement is another strong testament to the advantage of Agilent's standing workflow solutions. Before I leave DGG, I want to provide an update on the construction of our new NASD API production facility. We remain on track for the initial production of GMP-grade APIs by the end of fiscal year 2019 with material revenue contributions in FY20. Overall, it was a great quarter, capping off an excellent year delivered by the Agilent team. A few final comments before I turn the call over to Bob. Agilent's shareholder value creation model is fully activated. First, we are executing an innovation-driven growth strategy that is delivering. Second, we continue to focus on improving profitability with our Agile Agilent initiatives. Finally, we are actively leveraging our balance sheet to drive acquisitions of fast-growing, innovative companies while also returning cash directly to shareholders. We have transformed Agilent into a growth company and are focused on delivering superior earnings growth. We just delivered our highest growth and profitability since the launch of the new Agilent. Since then, our adjusted CAGR EPS is up 17%. Our business is also less cyclical today, with non-instrument sales making up over 56% of our total company revenue. If economic challenges would arise, our business is now less dependent on capital equipment purchases. Looking ahead to 2019, while acknowledging current trade discussions, we are expecting market conditions to remain solid. The Agilent team is laser focused on sustaining our strong growth into 2019 and beyond. We have momentum. I keep telling the Agilent team the best is yet to come. Thanks for being on the call, and I look forward to answering your questions. I will now hand off the call to Bob. Bob?