Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from John Wood - Banc of America
John Wood - Banc of America
Do you expect to be acquisitive in this environment over the next couple of quarters?
Bill Sullivan
Ask the question again please.
John Wood - Banc of America
Do you expect to be acquisitive, acquisitions on the table at this point or is it more of a wait and see mode as you see valuations reset?
Bill Sullivan
We continue to look at opportunities to expand the size of the company, the growth of the company through acquisitions. Obviously it’s a very volatile time but we are in a very, very strong financial position. Under Adrian’s team we constantly look at the landscape and we will in fact move on opportunities that we believe will enhance the long-term value of Agilent.
Adrian Dillon
As you know we have the same strict criteria on acquisitions as we do for our internal programs which means while they may be cheaper we still have the challenge and the obligation to create 20% return on that invested capital as well on average over the cycle. Based on that criteria the amount of synergy we need to create is lower as stock prices fall but we are still committed to achieving those kinds of returns.
John Wood - Banc of America
On the working capital side, obviously stable in the quarter but can you just talk about DSO’s what kind of bands we should expect next year. Do you expect that there will be a significant deterioration in the working capital metrics next year?
Adrian Dillon
No, I think that we will continue to demonstrate the same kind of disciplined performance that we’ve had for the past several years. The current range of DSO’s I think is what you should be assuming.
Bill Sullivan
Again, we continue to be very, very conservative in terms of taking risk upon the company. We clearly have seen evidence, particularly in Asia of people having more difficult in getting bank guarantees but we will continue to take a very conservative position in this area.
John Wood - Banc of America
It looks like the orders in Bio-Analytical were pretty good. Can you offer to qualitative commentary around the order trends by your sub-segments, major pharma, chemical analysis, and academic?
Bill Sullivan
Adrian had summarized them where we are and inclusive of acquisitions our academic which is really a very small market share of the company its only 4% of our total revenues grew over 20%. Likewise in the pharmaceutical and biotech our growth rate was in double digits. Of course we continue to do very, very well in the food industry as well as the petro-chemical industry and our chemical analysis.
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