Agilent Soars in Its Trading Debut

Bolstered by a strong market for initial public offerings, Agilent Technologies (A:NYSE), a spinoff of Hewlett-Packard (HWP), made a stunning debut on the New York Stock Exchange Thursday, trading at one point more than 60% above its IPO price of $30.

By early afternoon, Agilent was up 11 13/16, or 40%, to 41 7/8. (Agilent closed up 12 3/8 to 42 3/8.)

"Our NYSE listing is an important step on our way to independence," Ned Barnholt, president and chief executive of Agilent, said in a statement. "We now will be directly accountable for our results and to our shareholders."

The IPO consists of 65 million shares on offer, representing a 15% stake in the manufacturer of test and measurement products. At $30 a share, the Agilent stock was priced at the higher end of the upwardly revised range of $26-$28 a share. The offering raised $1.95 billion.

Computer and printer maker H-P benefited from Agilent's strength, as well as from the stronger-than-expected earnings it posted Wednesday evening. H-P's shares were up 11 5/8, or 14%, at 92 5/8 in early afternoon trading, leading the Dow Jones Industrial Average past 11,000. (H-P closed up 13 1/2 to 94 1/2.)

H-P will spin off its 85% stake in the test and measurement equipment maker in the middle of next year.

Investors are decidedly enthusiastic about the offering. "Agilent has a lot of things going for it," said Ken Fleming, an analyst with (IPOSX)IPO Plus Aftermarket Fund managed by Renaissance Capital. "They have the H-P name and they're targeting high-growth areas like telecommunications and semiconductors that have lots of potential." He expects the shares to continue to do well.

He warned, however, that Agilent shares were likely to decline when the company becomes fully independent of H-P. "There could be an overhang effect when index funds have to get rid of those shares," he noted. H-P is a member of the Dow Jones Industrial Average and the S&P 500, but Agilent is not.

On Wednesday, Agilent announced strong numbers for the quarter. For the quarter ended Oct. 31, Agilent reported net earnings of $146 million compared to a net loss of $51 million a year earlier. Revenue rose to $2.4 billion, 23% more than a year ago.

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