Agilent Technologies, Inc. is exiting its Nuclear Magnetic Resonance business. Agilent entered the NMR business in 2010, with the acquisition of Varian. Since then, the business has not met growth and profitability objectives.
“Today’s announcement represents a difficult decision necessary to drive improved profitability,” said Mike McMullen, president and chief operating officer, and CEO-elect. “The NMR team has been extremely dedicated and has made many excellent contributions. However, this action is a step in ensuring that our investments are placed on higher-value life sciences, applied markets and diagnostics solutions that will continue to drive growth across the company.”
Agilent will stop taking new NMR system orders immediately, but the company will continue to meet customer commitments for orders in progress and for ongoing support contracts. Agilent will continue to provide service on all installed NMR systems.
The company expects that this decision will eliminate about 300 jobs, mostly within the next 12 months. The majority of the affected positions are located in Yarnton, U.K., and Santa Clara, California.
Today’s announcement is part of Agilent’s strategy to address the business shortfalls of its Research Products Division. In early 2013 Agilent announced its exit of the OEM and Specialty Magnet business and later the MRI business to focus resources on the core NMR portfolio. Despite these adjustments, the NMR business has continued to fall short of growth and profitability objectives.
To cover the cost of exiting this business, Agilent will take an approximate $72 million restructuring charge in the fourth quarter. It expects a $20 million to $30 million decline in revenues in fiscal year 2015 due to the NMR business closure, but a positive impact of about $10 million in operating profit in FY15.
For the fourth quarter of 2014, Agilent anticipates non-GAAP earnings per share of $0.87 to $0.91, and projects revenues to be negatively affected by currency at about $13 million, and lower NMR-related revenues by about $12 million.