Key Quotes from Agilent on WIMAX, Semi-conductors and China

by: SA Editor Judy Weil November 19, 2008 | about stocks: A / ALVR / CLWR / CMCSA / ERIC / INTC / MOT / Q / S / T / TSM / VZ    
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Scientific gizmo-maker Agilent Technologies reported better than expected earnings for its fiscal Q4. On its FQ408 conference call, the test and measurement equipment manufacturer weighs in on the Wimax vs. LTE debate, the semi-conductor market and on China’s manufacturing sector.

On Wimax vs. LTE:

Wireless R&D was flat versus last year with mixed trends. Wireless LAN was about unchanged and WiMAX spending was down from last year but we’re still seeing good activity in 3.5G and 3.9G applications. This year we believe HSDPA and HSUPA will drive spending while we anticipate a pick up in LTE spending in 2010. By the way, last month we shipped the first commercial LTE protocol tester to our Anite partnership.

Broadband R&D and manufacturing remained a source of strength in the fourth quarter up 26% from one year ago while network monitoring was off 6% from last year due to tight customer budgets and increasingly aggressive competition.

Overall if you look at the R&D… we are the leader in LTE and WiMAX. LTE I believe will be a much better market. Again, Long Term Evolution will be the larger market that will rewire, recapitalization of the industry moving forward. I’m sure there will be lots of debate of how quickly that rolls out in this present economic environment but in terms of the investment it will in fact happen.

Semi-conductors may be poised to recover:

The computer and semi-conductor markets remain under considerable pressure... Consumer electronic spending is down and manufacturers are delaying capital investments. Given the macro environment, this weakness is expected to continue into fiscal year 2009.

We’ve emphasized the impact of the much lower semi-conductor capital equipment spending on our results but the reality is those businesses are now down over 50% peak-to-trough which already is a greater than an average decline in those markets. By definition you can’t fall that much again in the following year and we may be closer to the bottom of that than we think.

Potential areas of growth:

Revenue in the food safety market was up 14% y/o/y. The food industry is under continued pressure to ensure safety especially given the widely publicized food safety incidents... We helped China to develop a national standard for melamine testing. We expect this market to continue strong for some time to come.

The biotech area continues to do well the whole personalized medicine, the whole biology based therapeutics we believe that we can continue to make great in roads.

On manufacturing in China:

You’re going to see enormous pressure in China in consumer-related manufacturing… There’s evidence already of major contraction in consumer-related manufacturing in China.

 

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This article has 2 comments:

  •  
    Nov 27 10:59 AM
    Africa and Asia are where all the Wi-Max interest seems to be. America is too slow to adopt. Quite distressing..
    Reply | Link to Comment
  •  
    Nov 28 10:54 PM
    That's because America is much smarter...we're waiting for LTE. Vodaphone seems to be behind it so I trust them a bit more than companies that are new.
    Reply | Link to Comment
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