Agilent Technologies (NYSE: A) provides electronic measurement and bio-analytical solutions to the communications, electronics, life sciences and chemical analysis industries. Its Electronic Measurement segment offers such instruments as data generators, multimeters, and oscilloscopes. The Bio-Analytical Measurement unit sells instruments, software, consumables and services for quantifying the physical and biological properties of substances. Customers include Cisco Systems (NASDAQ: CSCO) and Merck (NYSE: MRK). The firm was a 1999 spin-off of Hewlett-Packard (NYSE: HPQ).

Agilent pleased investors last week, when it announced fiscal Q2 EPS of 51 cents and revenues of $1.46 billion. Analysts had been looking for 48 cents and $1.43 billion. Management also guided Q3 EPS to 52-56 cents (55 cent consensus), Q3 revenues to $1.44-$1.49 billion ($1.46B consensus), FY08 EPS to $2.07-$2.15 ($2.08 consensus) and FY08 revenues to $5.82-$5.93 billion ($5.83B consensus). Needham subsequently reiterated its "buy" recommendation and boosted its price target to $42. Standard & Poor's raised its Agilent outlook from "stable" to "positive".

Monday, May 12

• Sprint Nextel Corp. (NYSE: S) to report Q1 earnings; conference call at 8:00am.
• W.W. Grainger, Inc. (NYSE: GWW) to hold sales conference call at 8:00am.
• XM Satellite Radio Holdings, Inc. (NASDAQ: XMSR) and Sirius Satellite Radio, Inc. (NASDAQ: SIRI) to report quarterly earnings; the conference call is at 10:00am for XM and at 4:30pm for Sirius.

Tuesday, May 13

• Wal-Mart Stores, Inc. (NYSE: WMT) to report Q1 earnings; conference call at 7:30am.
• Toll Brothers, Inc. (NYSE: TOL) to report preliminary Q2 results and outlook at 2pm.
• Applied Materials, Inc. (NASDAQ: AMAT) to report Q2 earnings; conference call at 4:30pm.

Wednesday, May 14

• FCC Open Commission Meeting at 9:30am.
• SEC Open Commission Meeting at 10:00am.
• Macy's, Inc. (NYSE: M) to report Q1 earnings; conference call at 10:30am.
• Agilent Technologies, Inc. (NYSE: A) to report Q2 earnings; conference call at 4:30pm.

Agilent Technologies Inc. (NYSE: A) shares are trading higher today after the company posted a higher quarterly profit yesterday after the close. Net profit rose to $180 million, or 46 cents per share, from $149 million, or 36 cents a share, a year earlier. Revenue rose to $1.45 billion from $1.33 billion a year earlier and ahead of the average Wall Street forecast for $1.41 billion. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on A.

Agilent hit a one-year low of $30.26 in March, and made its one-year high of $40.42 in July. A opened this morning at $34.99. So far today the stock has hit a low of $34.93 and a high of $36.80. As of 11:00, A is trading at $36.80, up $3.10 (9.2%). The chart for A looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $32.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 10.4% return in just 9 weeks as long as A is above $32.50 at January expiration. Agilent would have to fall by more than 11% before we would start to lose money. Learn more about this type of trade here.

A hasn't been below $32.50 by more than a few cents since March and has shown support around $33 recently. This trade could be risky if the stock's earnings aren't quite as rosy as they seem at first glance, but even if that happens, this position could be protected by support the stock formed between $32.50 and $35 over the past four months.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in A.

MOST NOTEWORTHY: Viacom, Agilent, AudioCodes and Microsoft were today's noteworthy upgrades:

• JP Morgan upgraded shares of Viacom (NYSE: VIA) to Overweight from Neutral as they believe contractual rate increases and distribution of the company's newer networks will drive higher earnings growth in 2008. The firm does not believe this growth is priced into shares.
  
• JP Morgan also upgraded Agilent Technologies (NYSE: A) to Overweight from Neutral and added shares to its Focus List. Shares were upgraded based on its sum-of-the-parts valuation and sees further upside given that strategic buyers are back in the marketplace.
  
• AudioCodes (NASDAQ: AUDC) was raised to Buy from Accumulate at Think Equities, as they expect the company to benefit from the newly acquired CTI squared business, the security gateway business, and traction in the SBC business, with Microsoft's OCS launch of a new driver today.
  
• Goldman added Microsoft Corporation (NASDAQ: MSFT) to its Conviction Buy List, citing valuation and overwhelmingly negative sentiment, and expects shares to trade higher on a better Q1 report.

OTHER UPGRADES:

• RBC Capital Markets upgraded Citrix Systems (NASDAQ: CTXS) to Outperform from Sector Perform.
  
• Eaton Corporation (NYSE: ETN) was upgraded to Outperform from Market Perform at Friedman Billings.
  
• Citigroup upgraded Broadcom Corporation (NASDAQ: BRCM) to Buy from Hold.

Industrial, scientific and engineering operations are critically dependent on the precise measurement of basic physical parameters. Among the best known manufacturers of many of the devices required for these purposes is headquartered in Santa Clara, California.

Agilent Technologies (NYSE: A) provides electronic measurement and bio-analytical solutions to the communications, electronics, life sciences and chemical analysis industries. Its Electronic Measurement segment offers such instruments as data generators, multimeters, and oscilloscopes. Its Bio-Analytical Measurement segment provides instruments and consumables that enable customers to quantify the biological properties of substances. Customers include Cisco Systems (NASDAQ: CSCO), Dow Chemical (NYSE: DOW), Intel (NASDAQ: INTC) and Merck (NYSE: MRK). The firm was a 1999 spin-off of Hewlett-Packard (NYSE: HPQ).

Agilent announced the acquisition of life science research and diagnostic products firm Stratagene last week and said that, as a result, it expects Q3 revenues to be in the range $1.38-$1.42 billion. Analysts had been looking for $1.38 billion. The acquisition did not affect the company's earnings outlook. The news kept Agilent shares cycling through a positive two-month trading channel. The price is currently consolidating at the base of that channel, where oversold CCI, MACD, Momentum, RSI and Stochastic technical parameters suggest the potential for a rise back toward the top. Correspondence of the stock's 30-day moving average curve to the base of the channel backs the rebound notion.

Brokers recommend the issue with two "strong buys," three "buys" and four "holds." Analysts expect a 19% growth rate through the next year. The Agilent Price to Free Cash Flow ratio (21.92), Operating Margin (11.09%), Net Profit Margin (12.48%), Return on Assets (7.82%) and Return on Investment (10.00%) compare favorably with industry averages.

Institutional investors hold about 74% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $26.96 and $38.97. A stop-loss of $32.70 looks good here. Note that the firm expects to report Q3 results in mid-August.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

The semiconductor industry is one of the most competitive anywhere and efficient product testing is an essential part of the manufacturing process. One of the recognized leaders in the art of making reliable test equipment is headquartered in Singapore.

Verigy Ltd (NASDAQ: VRGY) is a leading manufacturer of advanced test systems for the flash memory, high speed memory and system-on-a-chip segments of the semiconductor market. Verigy's scalable systems are used by chip makers in the design validation, characterization and high volume testing of their products. An Agilent Technologies (NYSE: A) spin-off in 2006, the firm traces its roots back to Hewlett-Packard (NYSE: HPQ).

The company surprised the Street late last month, when it reported Q2 EPS of 40 cents and revenues of $183 million. Analysts had been expecting 35 cents and $176.2 million. Management also guided Q3 EPS to 45-50 cents (39 cent consensus) and Q3 revenues to $195-$205 million ($173.56M consensus). Banc of America Securities subsequently reiterated its "buy" recommendation and boosted its price target to $34. VRGY shares popped on the news and subsequently moved into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Altogether, brokers recommend the issue with two "strong buys," four "buys" and one "hold." Analysts see a 32% growth rate through the next five years. The stock's Price to Sales ratio (2.25), Price to Book ratio (3.93), EPS Growth rate (-0.22 to 0.40 yr/yr), Return on Assets (12.56%), Return on Investment (21.45%) and Return on Equity (23.54%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 77% of the outstanding shares. Over the past 52 weeks the stock has traded between $13.55 and $30.00. A stop-loss of $25.30 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

Motorola, Inc. (NYSE: MOT) rolled out some new handsets yesterday, as the cellphone manufacturer seeks to regain some of the magic that its iconic RAZR handset generated in 2004. Up front and center is the new RAZR 2 handset, which is the sequel to the RAZR, the best-selling wireless handset of all time. It will be carrying quite a bit of weight on its shoulders when released this summer. Can it rescue Motorola?

The original Motorola RAZR sold 50 million units in a staggeringly short period of time -- although half of that time the phone was being given away for free with long-term wireless contracts. as the phone grew old and plunged down the product lifecycle slide. Initially, the RAZR was priced at nearly $500 with a wireless contract, and surely the RAZR 2 will start there as well. But while the older RAZR re-defined the cellphone industry in terms of chic and style, the sequel may not have that panache, although it is loaded with futuristic features while being even slimmer than its predecessor. Is that enough?

Motorola needs another winner to get its house in order and sell as many higher-price handsets as it can to return to consistent profitability. Trying to get customers to shell out another $500 for the sequel to the most successful cellphone ever is not going to be easy, but it's something Motorola must do. If it fails (and we're standing here next year at this time with just a few RAZR 2 sales), Motorola CEO Ed Zander may need to put his resume on Monster.com (NASDAQ: MNST), even if Carl Icahn can no longer lobby for his dismissal.

Agilent Technologies Inc (NYSE: A), the Santa Clara-based test and measurement company, reported very solid results and guided toward continued improvement.

• Orders up 10%, revenue up 7%
• ROIC at 25%
• Bio-analytical business grew 15%, with particular strength in emerging markets

Going forward, it appears bio-analytics will remain strong and the opportunity for upside surprise is very possible considering improvements in electronics, particularly as it appears the communications business bottomed at the end of the quarter.

Electronic orders are up 8% and bio-analytics are up 14%. Signs the slowdown in wireless should end soon with an upswing expected for the back half of 2007.

I consider Agilent a must own stock, as all of its businesses are expected to be on a nice growth path in the second half of the year. Agilent has over $2.0 billion in cash, has a share repurchase program in place and is a big generator of free cash flow.

Online marketing is a hot topic, but the Internet is a specialized medium and success in that arena requires expert help. One of the industry's best known practitioners is headquartered in Seattle, Washington.

aQuantive Inc. (NASDAQ: AQNT) is a digital marketing services and technology company, which aims to help clients acquire, retain and grow customers across all digital media. Its Digital Marketing Services division provides Web site development, interactive marketing, creative development and branding. The Digital Marketing Technologies unit offers advertisers online campaign management, search engine marketing and Web site optimization tools. The Digital Performance Media segment buys blocks of online media advertising to resell on a targeted basis. The aQuantive client list includes Adobe Systems Inc. (NASDAQ: ADBE), Kellogg Co. (NYSE: K), McDonald's Corp. (NYSE: MCD), Pepsico Inc. (NYSE: PEP), Procter & Gamble Co. (NYSE: PG), Nike Inc. (NYSE: NKE) and Walt Disney Co. (NYSE: DIS).

The firm became the object of acquisition speculation, after Google Inc. (NASDAQ: GOOG) and Yahoo! Inc. (NASDAQ: YHOO) recently strengthened their respective Web positions by purchasing aQuantive digital marketing rivals. Client Microsoft Corp. (NASDAQ: MSFT) has been mentioned as a possible suitor.

Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Heinz-(NYSE: HNZ) out of the money May 50 calls active; HNZ trades to Record. HNZ is recently up $1.35 to $48.28. Nelson Peltz, an activist shareholder, has been a holder of HNZ shares over the last 20-months in an attempt for HNZ to lower annual costs, sell assets and return more to shareholders. HNZ May 50 calls have traded 254 times on transaction volume of 5,990 contracts above its open interest of 402 contracts. HNZ May 50 calls are bid .35 cents, near its theoretical value of .35 cents according to Track Data, suggesting non-directional price fluctuations.

Advanced Micro-(NYSE: AMD) calls active, May option implied volatility increases to 46. AMD, a global semiconductor company, is recently up .64 to $14.56. On 12/1/05 Silver Lake and Kohlberg Kravis Roberts formed Avago Technologies through the acquisition and carved out of the Semiconductor Products Group from Agilent Technologies, Inc. (NYSE: A) (formerly a division of HPQ) for $2.66 billion, one of the largest private equity buyouts of a semiconductor company. AMD call option volume of 52,272 contracts compares to put volume of 28,105 contracts. AMD May option implied volatility of 46 is above yesterday's level of 43 and its 26-week average of 43 according to Track Data, suggesting slightly larger price risks.

Option volume leaders today are: Yahoo (NASDAQ: YHOO), Motorola (NYSE: MOT), Amgen (NSDAQ: AMGN) and Intel (NASDAQ: INTC).

Bio-chemical instrument maker and measurement company Agilent Technologies (NYSE: A) reported good 1Q 2007 numbers. Revenues for the quarter were $1.28 billion, up 10% from 1Q 2006. GAAP income before equity for the quarter was $150 million, $0.36 per diluted share, double the $73 million, $0.15 per share in 1Q 2006. Adjusted net income from continuing operations was $162 million, $0.39 per share, 34% above last year's $0.29 per share. Revenue from its Bio-Analytic segment was up 22% to $455 million, Electronic Measurement sector was up 4% to $817 million, Life Sciences revenue were up 23% to $195 million, Chemical Analysis revenues were up 21% to $260 million, but handheld testing devices revenue was down.

Agilent has been making some strategic moves recently. It spent $70 million on acquisitions in the first quarter, and purchased $254 million of its own stock, ending the quarter with just over $2 billion in net cash. Agilent CEO Bill Sullivan expects revenues in 2Q 2007 to be between $1.3-$1.34 billion, up 5-8%, with net income in the $0.41-$0.45 per share range.

In related news, Agilent will accelerate its $2 billion stock repurchase program. All told, since 2005 through 2007, Agilent will repurchase more than $6 billion worth of shares.

Agilent recently announced its intention to purchase Stratagene for $246 million, $10.94 per share, a hefty premium over the stock's closing of $8.51 on the day of the announcement. Agilent also recently won a multi-year, $94 million contract from the U.S. Army to test radio communications networks under combat conditions.

Agilent Technologies (NYSE: A), the tech equipment company that was spun-off from Hewlett-Packard Company (NYSE: HPQ), reported solid results yesterday. While they might not drive the stock higher, it is a good stock to keep up to date with and buy on a market correction.

• Handset test measurement business was weak, which should not be a surprise since we have been blogging about weakness in the handset market for the past three or four months.
  
• Bio-analytical business is doing very well, having a "blow-out" quarter. Revenue was up 22% year-over-year. Operating profit in this business was up 69%. Sales to China and India were up 33% and 38%, respectively.Many of the people who made HP into a great company decade after decade are with Agilent. The company is a strong product innovator and also is run increase shareholder value.

Keep an eye on Agilent and jump in during market sell-offs. Agilent has a strong balance sheet and good product innovation to be around for a long time.