Moody's upgrades Agilent

Moody's Investors Service said it upgraded Agilent Technologies, Inc.'s corporate family and probability-of-default ratings to Ba1 from Ba2, affirmed the speculative grade liquidity rating at SGL-1 and revised the outlook to positive.

The agency said the upgrade reflects the completion of the final phase of Agilent's multi-year strategic repositioning and transition to a business model that has the propensity to deliver enhanced operating margins and consistently higher levels of positive free cash flow compared to prior periods and its peers. Over the past year, Agilent reduced infrastructure costs by 35% to better align its workforce and operating facilities with a smaller revenue base after the disposition of its Semiconductor Products Group in 2005 and Semiconductor Test assets earlier this year.

The upgrade also considered the company's more focused business strategy in less volatile business segments, recent research and development and investment efforts that were refocused to align Agilent's business with new market opportunities to capture market share and deliver above-average revenue growth, and the company's improved credit metrics, Moody' said.

The positive outlook reflects the agency's expectation that Agilent will demonstrate improving revenue growth in conjunction with higher margins driven by new product introductions, increased market penetration, favorable product mix, continued cost containment measures and significantly reduced restructuring charges.

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