Agilent Cuts 4,000 Jobs, Posts 3rd-Quarter Loss

Agilent Technologies Inc., a maker of test and measurement equipment, said it is slashing 4,000 jobs as it reported a fiscal third-quarter loss and said it expects business to stay sluggish for some time.

Company executives warned fourth-quarter revenue and earnings will fall short of analysts’ estimates.

The news sent shares of Palo-Alto-based Agilent down $2.34, or 9%, to $23.75 in after-hours trading. Agilent had closed off 36 cents at $26.09 on the New York Stock Exchange before the announcement.

The job cuts amount to 9% of Agilent’s worldwide work force. The move follows the company’s decision in April to cut all employees’ pay by 10%.

Since then, demand for Agilent’s products for the communications and semiconductor industries has remained weak, with a recovery expected to be “slow and gradual,” Chief Executive Ned Barnholt said.

“This decision is one we don’t make lightly,” Barnholt said. “This is by far the worst industry downturn I’ve seen in my 34 years with the company.”

Agilent, which was spun off in 1999 from Hewlett-Packard, said the job cuts will be imposed by mid-2002 and will save the company about $500 million a year. Agilent will take a $200-million restructuring charge to account for its layoffs.

For the quarter ended July 31, Agilent reported an operating loss of $109 million, or 24 cents a share, contrasted with a profit of $155 million, or 34 cents, a year earlier, as revenue fell 23% to $1.8 billion.

The average estimate from analysts was for a steeper loss of 35 cents a share, according to Thomson Financial/First Call.

Agilent’s loss including one-time items was $219 million, or 48 cents a share.

Agilent said it was plagued by a combination of excess capacity and weak demand in the industries it served. About half of the job cuts will come in manufacturing.

The company registered $1.3 billion in orders in the quarter, but orders worth about $240 millionwere canceled. Barnholt said Agilent still generated positive cash flow and will be nearly debt-free by the end of this month.

Barnholt also said revenue in the current quarter should be $1.3 billion to $1.5 billion, with the company’s loss widening to 50 cents to 70 cents a share, excluding charges. Analysts forecasted a loss of 17 cents on revenue of almost $1.8 billion.

Barnholt said Agilent appeared to be “bouncing along the bottom.”

“We do believe the turnaround is going to come,” Barnholt added. “It’s just hard to tell when it’s going to happen.”