Agilent's Chinese Turnaround and Tariff Tailwind: A Beat-and-Raise Quarter
Strong across-the-board growth, with China returning to double digits and reshoring order wins, lifts full-year guidance.
A · Earnings Call · 2026-08-26
A Quarter That Exceeded on All Fronts
Agilent's Q3 FY2026 results were nothing short of a beat-and-raise, with revenue of $1.88B growing 7.3% on a core basis and EPS of $1.56 ex-refund, $0.06 above the high end of guidance. “We delivered an excellent third quarter with strong performance on both the top and bottom lines.” — Padraig McDonnell, Chief Executive Officer (CEO) · 2026-08-26 The quarter's strength was broad: pharma grew 12%, the advanced therapeutics division (CDMO) surged nearly 30%, and operating margin expanded 210bps year-over-year ex-refund. Operating income in Q2 (sequential quarter) was already $408M, and the call shows further acceleration in Q3. The company raised full-year core growth to 5.8–6% and EPS to $6.18–6.21 (including $0.06 from tariff refunds). This is the second consecutive quarter of acceleration, and tariff refunds provided a one-time boost, but management was quick to note the ex-refund beat still represented 14% EPS growth.The China Inflection
The most striking change from prior quarters is China. After several quarters of flat or declining revenue, China grew 9% in Q3, far ahead of the expected flat. This echoes the prior quarter's commentary where “we see the China market stable doing around 300 million per quarter” — Padraig McDonnell, CEO · 2026-05-27. Now, with strong demand in pharma and food, and competitive wins including two leading CXOs, the narrative has shifted. As management put it, “we're very bullish about China for the future.” — Padraig McDonnell, Chief Executive Officer (CEO) · 2026-08-26 The turnaround is not purely driven by stimulus; Padraig noted minimal stimulus benefit, instead citing "strong execution with commercial accounts, especially within the pharma and food end markets." This is a genuine company-specific inflection, as other tools peers have not yet reported similar rebounds.New Catalysts: Altura, Reshoring, and CDMO Capacity
Beyond China, Agilent is riding multiple new product cycles. The Altura column family is expanding rapidly, with 28% quarter-over-quarter growth in new biopharma accounts adopting the columns. The 9500 ICP-MS and 8890B/8860B GCs are exceeding ramp targets, feeding a CDMO business that is already nearly full for Train C. As CFO Adam Elinoff noted, “the majority of our capacity available in Train C spoken for already.” — Adam Elinoff, Chief Financial Officer (CFO) · 2026-08-26 Reshoring is another fresh driver: management secured orders from 5 of the top 10 pharma companies in Q3 alone. “We have secured reshoring orders from 5 of the top 10 pharma companies in the world in the third quarter alone.” — Padraig McDonnell, Chief Executive Officer (CEO) · 2026-08-26 This is a direct result of the Net tariff refunds and trade policies that are reshaping pharma supply chains – a theme echoed across other recent reporters like ANF and HPQ, reinforcing that Agilent is riding a broader macro tailwind but executing with company-specific discipline.Looking ahead, the combination of a recovering China, a multiyear instrument replacement cycle, and Ignite-driven operational improvements positions Agilent for sustainable above-market growth. The 90-day stock return of +33% reflects the market's recognition of this momentum.Make no mistake, our extraordinary Q3 results are no accident, nor are purely a function of improving end markets.