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Agilent Technologies, Inc. (NYSE:A)
Q3 2018 Earnings Conference Call
August 14, 2018, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen and welcome to the Q3 2018 Agilent Technologies, Inc. earnings conference call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will host a question and answer session and our instructions will be given at that time. If during our conference today, you require operator assistance, press * then 0 and our operator will be happy to assist you. As a reminder, this conference call is being recorded for replay purposes.

It is now my pleasure to hand the conference over to Miss Alicia Rodriguez, Vice President of Investor Relations. Ma'am, you may begin.

Alicia Rodriguez -- Vice President of Investor Relations 

Thank you, Brian and welcome everyone to Agilent's third quarter conference call for Fiscal Year 2018. With me are Mike McMullin, Agilent's President and CEO, and Didier Hirsch, Agilent's Senior Vice President and CFO. Joining in the Q&A after Didier's comments will be Jacob Thaysen, President of Agilent's Life Science and Applied Markets Group, Sam Raha, President of Agilent's Diagnostics and Genomics Group, and Mark Doak, President of the Agilent CrossLab Group.

I'm also pleased to announce that Bob McMahon is joining us on the call today as well. As you know, he will be taking on the role as Agilent's CFO in September due to Didier's retirement at the end of October.

You can find the press release and information to supplement today's discussion on our website at www.investor.agilent.com. While there, please click on the link for financial results under the financial investor tab. You will find an investor presentation along with revenue breakouts and currency impact, business segment results and historical financials for Agilent's operations. We will also post a copy of the prepared remarks following this call.

Today's comments by Mike and Didier will refer to non-GAAP financial measures. You will find the most directly comparable GAAP financial metrics and reconciliations on our website. Unless otherwise noted, all references to increases or decreases in financial metrics are year over year. References to revenue growth are on a core basis. Core revenue growth excludes the impact of currency and acquisitions or divestitures within the past 12 months Guidance is based on exchange rates as of July 31st.

We will also make forward-looking statements about the financial performance of the company. These statements are subject to risks and uncertainties and are only valid as of today. The company assumes no obligation to update them. Please look at the company's recent SEC filings for a more complete picture of our risks and other factors. Now, I'd like to turn the call over to Mike.

Mike McMullin -- President and Chief Executive Officer

Thanks, Alicia. Hello, everyone. Thank you for joining us on today's call. Before I discuss the Q3 financial highlights and our updated outlook, I'm pleased to have Bob McMahon join the call. Bob is an excellent choice for Agilent's next CFO and a very capable successor to Didier. Bob brings a strong track record of leadership to our team. Many of you already know Bob from his previous role as CFO of Hologic. He officially assumes the CFO role beginning September 1st.

As Didier hands of the baton, he will serve in an advisory capacity until his retirement at the end of October. Bob and Didier are working together to ensure a smooth transition. I first met Bob over coffee in Palo Alto, where we shared our perspectives on business and company culture. We had an important conversation about values and their importance to business.

I knew immediately that Bob would be a great fit for the Agilent culture and of course, his management style and business acumen are a perfect match for our approach to creating shareholder value. Bob has joined Agilent at an exciting time. I'm confident that he will help us lead the next phase of Agilent's growth.

While I'm very excited to have Bob join the Agilent team, I will greatly miss Didier's partnership and counsel. He has played a key role in the transformation of the company and our excellent business results. It's important for the CEO to have a very capable CFO. I couldn't have asked for a better partner. Thank you, Didier. You will be missed by me and our Agilent team.

Now, let me turn to our Q3 financial performance. The Agilent team delivered another strong quarter, with both growth and earnings exceeding our expectations. Our core revenue grew 6% as above the high-end of our guidance.

Our adjusted EPS of $0.67 is $0.04 above the high end of our guidance despite currency headwinds since our last guide. This is a 14% increase from a year ago. We delivered an adjusted operating margin of 22.6%, which is an increase of 110 basis points from a year ago. This marks our 14th consecutive quarter of improving our core operating margins.

Let's take a closer look at our results by our end markets. We continue our strong pharma performance with 8% core growth. This is against a tough comparer as we grew 10% in Q3 17. We see strength across all our business groups, with particularly strong performance in mass spectrometry, cell analysis, CrossLabs consumables and services, and genomics. Growth remains robust in both the biopharma and small molecules market segments. Our chemical energy market revenue grew 12%. We are quite pleased with this strong growth, again, against a difficult prior year comparer of 10%.

Ongoing market investment remains positive. This is in spite of tariff rhetoric and retaliatory policies you'll be hearing in the news. By a product perspective, strength in spectroscopy, GC, CrossLabs consumables and services is driving this result.

Geographically, strong gains in China and Europe are leading the overall global growth. Revenue grew 3% in academia and government in line with expectations. Strong performance from cell analysis, molecular spectroscopy, ICP-MS, and CrossLabs services and consumables are driving the results. China and the rest of Asia are delivering double-digit growth in this end market.

Diagnostics and clinical revenue grew 5%, led by strength in genomics and our Reagent Partnership business. This offset continued challenges in the US pain management market. Food revenue declined 1%. Strength in Americas is being offset by declines in Europe versus a tough comparer of 35% growth rate last year.

And as expected, China instrument sales were also down this quarter. Environmental forensics is flat this quarter. Forensics growth was offset by the expected temporary slowing of instrument sales in China environmental.

Geographically, let me first start with an overview of China. Our overall China business remains strong, growing 10% this quarter. Strength in China is being driven by double-digit growth in our two largest end markets, pharma and chemical and energy. Our CrossLab and DGG businesses also grew by double-digits. We continue to expect healthy overall market conditions. This is more than offsetting any temporary slowing of instrument sales in the food and environmental markets.

The business is also strong in the Americas and the rest of Asia outside of China, with these two regions delivering healthy, high-single-digit growth. Europe was flat on a tough comparer of 12%.

In summary, we delivered a strong quarter with broad-based strength and standout performances in the pharma, chemical energy, and China markets. Now, let's discuss results from our three business groups.

The life science and applied markets group delivered core revenue growth of 5%. This result is being driven by robust growth in the pharma and chemical energy markets. From a product perspective, LC/MS, cell analysis, and ICP-MS are leading the results. Ultivo, our game changing LC/MS triple-quad continues to be well-received. Geographically, demand in America and China are leading the results.

Let me share a few examples of how we're executing on our strategy to increase the depth and breadth of LSAG's solutions portfolio. On the M&A front, we closed on the acquisition of Genohm in early May. Genohm complements Agilent's informatics capabilities by adding laboratory management services. By integrating Genohm's LIMS platform into our open lab portfolio, we can provide complete and integrated informatics solutions to our customers.

Customers are very focused on informatics as a way to create insight and drive lab efficiencies. We are determined to lead in lab informatics. For example, last week, Agilent released the first software supporting the new standardized data format called the Allotrope Data Format, our ADF for short. This format was created by a consortium of pharmaceutical companies for the pharmaceutical industry.

By standardizing the collection, exchange, and storage of analytical data captured in laboratory workflows, labs will be able to transfer and share data across platforms. We are proud to be the first company to develop and launch a commercial product to support this standard. We believe the adoption of standards like ADF will both shape the future and lab informatics and drive the adoption of our solutions.

In addition, our additional LSAG innovation engine continues to deliver. We just released the Agilent Seahorse XF real time ATP rate assay kit. This new and unmatched product will enable biologists to enhance their understanding of how live cells function in real time.

We are a leader in live cell analysis and continue to expand our offerings in this fast-growing market. The Agilent CrossLab group continues its outstanding performance with 8% core revenue growth. Gains across our major end markets, led by double-digit growth in chemical energy and strong results in pharma and food. Performance is a balance across consumables and services.

China led growth in all regions with mid-teens growth. CrossLab is a key growth driver of the new Agilent. We are delivering on our mission to improve both the science and the economics of our customers' labs. As we expand and strengthen the CrossLab platform, we are creating more value for our customers and Agilent. For example, during the quarter, we announced two acquisitions that will further expand our consumables portfolio. We acquired the business assets of Ultra Scientific, a provider of chemical standards and certified reference materials.

On August 1st, we also acquired ProZyme, a provider of biopharma consumables for glycan analysis. As you know, glycan analysis is central to the development of biotherapeutic drugs and we will now directly participate in this fast-growing biopharma market segment.

We continue to invest in building our leadership position in China. We recently opened a new logistics hub in Shanghai. This hub will enable faster delivering of parts, supplying consumables to laboratories. This is the first of five forward stocking locations we are establishing. This allows us to improve the service and the speed at which we support our customers.

Our focus on digital investments is also delivering results and gaining traction. Our digital channel orders are growing at a record pace. For the first time ever, over 50% of our consumables orders are now digital. China is leading the charge on this front. We are improving the customer buying experience, expanding our customer reach, and driving growth.

The diagnostic genomics group delivered core revenue growth of 5%. Excluding our NASD business, which a decline is expected in the quarter, the DGG group delivered core revenue growth of 7% against a tough comparer.

Let me further explain -- as we've mentioned previously, NASD revenues are batch-based, which can make the revenue vary for quarter to quarter, depending on timing of customer acceptance. As expected, the business declined in a quarter as it was going up against a 45% growth rate in Q3 of last year. We expect the business to return to growth in Q4. As I mentioned, without this variability reported revenue effect this quarter, our core DGG business grew 7%.

A few additional comments on our NASD business -- I just returned from a visit with our team in Colorado. The capacity expansion under way will allow us to meet the growing demand for GMP-grade oligonucleotides and CRISPR offerings. I'm pleased with our progress on our new facility and the strong market environment.

For example, just last week, one of our customers, Alnylam Pharmaceuticals, received FDA approval for Onpattro, a first of its kind targeted RNA-based therapy to treat a rare disease. This is wonderful news for Alnylam and most importantly their patients. NASD remains a long-term growth play for Agilent and I'm excited about the future.

Back to the overall DGG results -- strong results are driven by double-digit growth in genomics and the strength of our Reagent Partnership business. Geographically, outstanding growth in China and Japan shows results. We continue to strengthen our ability to support the fight against cancer and other diseases. Burning Rock Dx received China FDA approval for their human lung cancer NGS detection kit. Agilent SureSelect reagents are used as part of this panel. Our own PD-L1 companion diagnostics product received expanded USDA approval in cervical cancer.

During the quarter, we completed the acquisition of AATI, Advanced Analytical Technologies Incorporated. AATI provides capillary electrophoresis-based solutions for fully automated analysis of a range of molecules. This acquisition builds on Agilent's existing expertise, providing customers a more comprehensive set of solutions for NGS workflows and other applications. NGS is driving and will continue to drive strong growth for this new business to Agilent.

With the addition of the AATI team, we created a new biomolecular analysis division with DGG. This new division now also includes or complementary microfluidics business previously part of our LSAG group. Didier's team has reflected this change in our current financials along with accompanying financial restatements.

Now, let me provide a few remarks on where we are on the Agilent journey and our near-term outlook before turning the call over to Didier.

Let me start with a few comments on tariffs. On the customer side, we are not seeing any changes in customer buying behavior. On the duty front, we have planned for and have taken actions to partly offset the impact of expected increases in tariff-related duties. This proactive approach resulted in a small $500k impact on our Q3 results. In Q4, we expect an impact of approximately $3.5 million of incremental duty costs for approximately $0.01 of EPS, which has been incorporated into our latest guidance.

Looking into 2019, if the tariffs remain in place, we plan to aggressively reduce the remaining effect in potential change in our prices and further adjustments to our supply chain. For some time, we have been on a path to increase shareholder value. We've been focused on delivering strong growth while expanding core operating margins and putting our strong cashflow and balance sheet to work in a more impactful manner.

Q3 results demonstrated our continued commitment to creating value for our shareholders and customers. We delivered another quarter of strong operating results while deploying our capital as committed. We returned $291 million in capital to shareholders through repurchasing $243 million of our own shares and paying out $48 million in dividends.

We are also investing in the business. We closed four acquisitions, paying out $430 million in the quarter and announced two more acquisitions. This is a record number of Agilent and will further strengthen our company's foundation for growth.

As we continue to aggressively strengthen our portfolio via the Agilent innovation engine and M&A, we are also continuing to execute on our agile Agilent customer experience and efficiency improvement initiatives. The twin drivers of our success continue to be a strong portfolio and a customer-focused way of doing business.

Now, a few words about our outlook going forward. The Agilent team continues to capitalize on healthy end markets. We remain confident in our outlook. We are increasing our full-year core growth and earnings guidance. Didier will walk you through the details, but we raised our guidance for core revenue growth, operating margins, and EPS.

The Agilent team remains committed, confident, and energized about our future. In our Agilent DNA is our team's ability to drive customer-focused innovation coupled with operational excellence. It is this powerful combination that will continue to fuel our future growth and earnings expansion.

Thanks for being on the call and I look forward to answering your questions. I will now hand off the call to Didier, who will share more insights on our Q3 financials and guidance. Didier?

Didier Hirsch -- Senior Vice President and Chief Financial Officer

Thank you, Mike. Hello, everyone. First, let me express my appreciation for Agilent employees' passion and professionalism in accomplishing their mission, creating shareholder value, and finally, for their support throughout the years. With Mike's continuing leadership and Bob's contribution, I'm convinced that the best is yet to come for Agilent.

As mentioned by Mike, we delivered strong top and bottom line results, both on a year over year basis and versus our guidance. On the revenue front, we beat our midpoint guidance by $14 million after excluding currency headwinds of $11 million and contributions from our two recent acquisitions, AATI and Ultra Scientific of $5 million.

Our core revenue growth of 5.9% was well over the midpoint guidance of 4.25%. Our adjusted operating margin of 22.6% was 110 basis points over last years and 120 basis points over guidance. And we delivered a core operating margin incremental of 55%.

EPS was $0.05 above the midpoint of our guidance. During the quarter, we bought back 3.36 million shares for a total of $243 million and paid $48 million in dividends. Finally, we repatriated $1.5 billion of our offshore cash.

I'll now turn to the guidance for fourth quarter. We expect Q4 revenues of $1.24 billion to $1.26 billion and EPS of $0.72 to $0.74. At midpoint, revenue is expected to grow 4.7% on a core basis. Versus previous guidance, FX is projected to have a negative impact of $21 million on revenue and $2 million on operating profit. Our 23.6% adjusted operating margin at midpoint will be 100 basis points sequentially and up 30 basis points on a year over year basis, even after funding the Lasergen R&D.

The increase in tariffs, effective early July, is expected to have a negative impact of $3.5 million, as we have initiated actions to our supply chain. When those actions are complete mid-2019, we expect the net annualized impact to be approximately $9 million, excluding potential pricing actions.

Now, to the guidance of Fiscal Year 2019 -- the Q4 guidance is expected to result in the following fiscal year guidance -- first, at midpoint, revenue is projected to grow 6.1% on a core basis or 60 basis points over the previous guidance. The revenue guidance of $4.87 billion is $10 million over previous guidance, including $22 million due to the acquisition of AATI, Ultra Scientific, and ProZyme with currency having a negative impact of $32 million.

Second, our EPS guidance of $2.70 at midpoint is up $0.05 from previous guidance and corresponds to a 14% year over year increase. Third, adjusted operating margin for the year is expected to be 22.6% or 60 basis points higher than in Fiscal Year '17. And fourth, our core operating margin incremental is expected to be 39% for the fiscal year at the high end of our operating model.

With that, I'll turn it over to Alicia for the Q&A.

Alicia Rodriguez -- Vice President of Investor Relations 

Thank you, Didier. Brian, will you please give the instructions for the Q&A? Thank you.

Questions and Answers:

Operator

My pleasure, ma'am. Thank you. Ladies and gentlemen, at this time, if you would like to ask a question over the phone lines, press * and then 1 on your telephone keypad. If your questions have been answered and you wish to remove yourself from the queue, simply press the # key. We ask everyone who has participated in today's Q&A session to please limit yourself to one question and a follow-up.

Our first question will come from the line of Steve Beuchaw with Morgan Stanley. Your line is now open.

Steve Beuchaw -- Morgan Stanley -- Analyst

Hi, guys. Thanks for all the help here and thanks for the time. I'd say first, it's hard not to echo some of Mike's comments -- Didier, really appreciate everything you've done being such a great partner for us. So, I hate to see you go. Bob, welcome aboard.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

Thank you very much, Steve. Much appreciated.

Robert W. McMahon -- Incoming Chief Financial Officer

There's a big smile in the room here, Steve. Thanks for those comments.

Steve Beuchaw -- Morgan Stanley -- Analyst

Bob, I have to say Didier is a pretty unique guy. As someone who shares some of his lineage, it's going to be hard for you to match that. The questions I'd like to focus on first are very high-level for Mike. When you made the decision to raise the guidance at core, it would be really helpful for you to kind of talk us through here's what after a quarter may be confident in saying, "We're going to beat the expectations we set earlier in the year." What really jumped out to you in terms of things going better.

Mike McMullin -- President and Chief Executive Officer

Great question, Steve. I appreciate the opportunity to share that with you. Obviously, we have a good view of our order funnel, so that gives one level of confidence, which is the strength of the orders. But what really gives me a lot of confidence moving forward is two dimensions of the story here. One would be the end market strength. Both chemical and energy and pharma continue to be very strong.

As you know, coming into this year, we had positioned chem energy as sort of the upside in the plan. That was sort of the wildcard to our business. There were some concerns that perhaps all the rhetoric around tariffs and other things a few months ago might actually be detrimental to this marketplace, which, in fact, has not at all occurred.

I think it's the continued strength in both those two end markets and I think geographically, Asia, led my China, we posted a really strong China number and then the Americas was also quite strong for us. I think the fact that our two longest geographies in terms of countries in China in the United States are really doing quite well. It gives us a lot of confidence about the outlook from a market perspective.

Then I think we were really positioned well to win. Our portfolio continued to become much more competitive and as you know, we have a unique value proposition with our CrossLab platform, which really allows us to capture a lot of the growth that was out there as well.

Steve Beuchaw -- Morgan Stanley -- Analyst

And then just a couple of quick follow-ups before I jump back into queue -- one is, Mike, you made a comment about customer behavior on tariffs and I appreciate the follow-up there, but it would be really helpful if you could spend another minute on it. It sounds like your perspective is the tariff headlines aren't changing the way that people really think about doing what they do. I wonder if you can just give us some anecdotes on what you hit on that point.

And then Didier, it was a really good quarter in terms of core margin expansion, the incrementals, really good. Any color on what it is that you've seen that made the quarter so strong on that front and how we should think about seasonality there would be great. I really appreciate it.

Mike McMullin -- President and Chief Executive Officer

Let me take on the first question. When I've been out talking to the customer base, you talk to people in the pharmaceutical industry, you talk to people in the research space, whether it be in academia, in the private sector, they're taking a long-term view of investments. Purchasing our solutions are absolutely critical for enabling their plans, if you will, and research plans. They're not at all distracted by the tariff discussion.

As I mentioned in my last call, we have seen some cautiousness in certain aspects of the chemical energy market where they were a little bit slower to improve the deals, but they're still getting deals approved. It's the same kind of situation we had last quarter. So, no new changes in customer buying behavior. This is coming directly from conversations I had with customers. Again, that gives a lot of confidence about our outlook because despite all the noise and rhetoric out there, it really hasn't yet affected any of the actual buying behavior of customers.

Obviously, it's creating some work for us relative to adjusting our supply chain and production locations to mitigate the duty impact side of things, but in terms of customer buying behavior, I have not seen any real changes.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

And then Steve, on your question on the core operating margin incremental, you're right. It's been impressive at 57%. The reasons are multiple. We started off with last years comparer. That was a little bit of a soft comparer. We had operating margin down a little bit sequentially from Q2. Then there was good operating leverage, good mix, the impact of all the Agilent programs. We certainly don't expect to maintain such a high level of core operating margin.

Mike McMullin -- President and Chief Executive Officer

Part of your parting gift from the Agilent team.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

Well, I appreciate the gift from the Agilent team, that's for sure.

Mike McMullin -- President and Chief Executive Officer

But in all seriousness, it goes back to some of the things that Didier outlined at the AID meeting in New York, where he said listen, our pipeline and our programs are as robust as ever in terms of really allowing us to work on the operating margin increments.

Steve Beuchaw -- Morgan Stanley -- Analyst

Thanks so much, guys.

Operator

Thank you. Our next question will come from the line of Tycho Peterson with J.P. Morgan. Your line is now open.

Tycho Peterson -- J.P. Morgan -- Managing Director

Thanks. Mike, I want to follow-up on some of the strength in China. Can you maybe talk about some of the puts and takes there? I think you called that a weakness in the slide. So, if you could, just talk to maybe where there's some softness. Then on the supply chain dynamic, could you maybe just flesh that out a little bit? I think you do some of the production there as well Delaware. So, could you maybe just talk a little bit about how you are potentially thinking about moving supply chain, if you need to?

Mike McMullin -- President and Chief Executive Officer

Sure. Happy to do so, Tycho. Let's start with China. Again, very important market for us. We were just delighted by the strength in the business. If you look at the six end markets, we had strong growth in all but two. We actually had foreshadowed this coming in our last call, saying hey, we know there are some things happening relative to some reorganization of certain ministries in the country. Nothing happened to us relative to the competitive side of the business.

So, we saw continued strong demand in pharma and chemical energy, investments in academia and government, hence back to some of the comments I made around tariffs. As you may recall in our AID presentation, we talked about the opportunities we had with our CrossLab business and our DGG business. You saw us starting to deliver on those promises with really strong double-digit growth in both of those businesses.

Then relative to food and environmental, we think that's a temporary situation as it relates to instrument purchases. You have to keep in mind that they'll continue to buy consumables and services from us. We're just waiting to have the reorganization complete, the budgets finalized.

We know how to follow the money where it's going to go because two things are really happening here -- you've got the consolidation going on where new budgets are being created in the consolidated ministries. Then part of that money is also getting deployed to what we called tier three and four cities. So, we're following the money and we're going to be ready to capture it once it's there.

Tycho Peterson -- J.P. Morgan -- Managing Director

And on the supply chain?

Mike McMullin -- President and Chief Executive Officer

Oh, yeah, I forgot about that. The supply chain, as I mentioned in my script, we took some actions in advance of the formal announcement of the tariffs. We've already relocated our production for China-made products into our site in Wilmington, Delaware. Now, we're in the process of moving aspects of the supply chain, which is also subject to the tariffs, but we've already moved the production and some of the supply chain.

Tycho Peterson -- J.P. Morgan -- Managing Director

Okay. Then two quick follow-ups -- for NASD, you highlighted the inherent lumpiness in that business and the fact that it will return to growth in the fourth quarter. Can you maybe talk about how we should think about the ramp there next year ahead of the capacity coming online?

Mike McMullin -- President and Chief Executive Officer

Yeah. We're going to try to get as much growth out of our current facility as possible. Then the expansion will start to come online in the second half of next year. The current plan is the second half of '19, we start to see some initial revenue starting to ramp through the quarters. I think we've put out a number of...

Didier Hirsch -- Senior Vice President and Chief Financial Officer

Next year? About $20 million is what we said at the ID.

Mike McMullin -- President and Chief Executive Officer

So, it really gets started next year. Then when you get to '20 is when you get the real full-year ramp. Bob and I and Didier were just in Colorado, as I mentioned, and had a chance to not only review the progress of the facility construction and capability expansion, but also what's going on with relative demand to different customers. The pipeline looks really encouraging.

Tycho Peterson -- J.P. Morgan -- Managing Director

Last one -- can you just comment on how much Intuvo is contributing to C&E growth at this point?

Mike McMullin -- President and Chief Executive Officer

I think it's part of the mix growing with the average. Yeah. I wouldn't say it's an outside contribution, but it's delivering.

Tycho Peterson -- J.P. Morgan -- Managing Director

Okay. Thank you.

Operator

Thank you. And our next question will come from the line of Doug Schenkel with Cowen. Your line is now open.

Doug Schenkel -- Cowen and Company -- Managing Director

Hi, good afternoon. Before I get to the questions, another hearty thanks to Didier. You've been a great leader at Agilent. I know I speak for many of us in saying we really appreciate all your help over the years. I look forward to grabbing another glass of wine at some point soon. As always, it will be your choice.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

Okay. Thanks.

Doug Schenkel -- Cowen and Company -- Managing Director

Bob, while Agilent has big shoes to fill, it's great to know they made such a great choice. Congrats to you and the company. Now, for the questions -- on Q4 guidance, can you talk a bit more about the rationale behind 4.7% core growth? This would be a deceleration versus what we saw this quarter. That's in spite of comparisons that don't appear much different.

I didn't hear anything in your prepared remarks regarding timing, dynamics or changes in momentum relative to what you've generated year to date. Is it fair to assume you're baking in some conservatism here? I'm admittedly having a hard time figuring out why growth wouldn't continue at around 6%, the underlying rate for most of this year. Am I missing something on end markets or timing dynamics or something else?

Mike McMullin -- President and Chief Executive Officer

I think we decided to stay true to the guidance, even as Didier retires. As Didier has mentioned in prior calls, we don't assume everything is going to be perfect in the quarter. The one that could go one way or another always has been chemical energy. If that business holds up and has been holding up, we should be in a good position to beat that number.

Doug Schenkel -- Cowen and Company -- Managing Director

Great. Then sort of related, from a buyback standpoint, the stock was in the low 60s for much of the quarter. I think you still have about $240 million in the buyback authorized. If I'm not doing that math right, there's certainly enough dry powder to put in place another authorization. I'm just wondering why you weren't a little bit more active in buying shares during the quarter.

Mike McMullin -- President and Chief Executive Officer

Thanks for that, Doug. I think the numbers are right, about $240 million to $270 million. So, you're in the right range. We actually thought we were fairly aggressive because we went out right after what we saw was a dislocation in the stock price after the Q2 announcement and bought $200 million right away and then continued our anti-dilutive. We'll obviously continue to look at that during the upcoming quarter.

Doug Schenkel -- Cowen and Company -- Managing Director

One last one -- you guided us to expect China food revenue growth would start to rebound generally in Fiscal 19. Based on what you've seen over the last few months, anything that would tell us or tell you this is aggressive or maybe things start to thaw a little more quickly than anticipated?

Mike McMullin -- President and Chief Executive Officer

I think we're going to stay with those initial estimates. We signaled that in the last call that based on experience, it takes a good six months or so to work with these things. I think from what I hear from my team, it's tracking along the same lines.

Doug Schenkel -- Cowen and Company -- Managing Director

Okay. Alright. Thanks again.

Mike McMullin -- President and Chief Executive Officer

You're welcome.

Operator

Thank you. Our next question will come from the line of Patrick Donnelly with Goldman Sachs. Your line is now open.

Patrick Donnelly -- Goldman Sachs -- Analyst

Great. Thanks. Just expanding on Tycho's question on supply chain, given that the tariffs are in focus, are you able to just walk us through the import/export dynamics in China, just looking explicitly at how much of the China revenue is being imported from the US and maybe where the majority of those revenues is being manufactured and then kind of the same thing on US revenues, anything being imported from China there.

Mike McMullin -- President and Chief Executive Officer

So, Patrick, you're looking at both incoming from China and from China to the US?

Patrick Donnelly -- Goldman Sachs -- Analyst

Yeah, exactly.

Mike McMullin -- President and Chief Executive Officer

So, from China to the US, it's a relatively small amount of Agilent's business. It's primarily the gas chromatography product line and related support parts.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

Yeah. So, it's about $100 million. That's why the 25% gives us about $25 million gross impact. Then, as we mentioned, we're going to reduce that amount over time before pricing adjustments, $9 million on an annualized basis. Then going the other direction, basically, China, we import from the US the GC/MS and many reagents in chemistry are made in the US, but there is no tariff at this stage. There might be in the future and we'll update you on the potential impact. It's not significant, really, at the end of the day.

Mike McMullin -- President and Chief Executive Officer

And as Didier mentioned, we have a fairly global footprint in terms of manufacturing. So, Didier mentioned a couple of the products are made in the US that go into China inclusive of our reagents. We also have a large facility in Germany and Asia.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

That's not subject to retaliation.

Mike McMullin -- President and Chief Executive Officer

So, basically, we have a lot of our business that's outside of this tariff discussion.

Patrick Donnelly -- Goldman Sachs -- Analyst

That's helpful. Then just staying in China, given the soft July data points out this morning, including China industrial production coming in light of expectations, can you just talk through the cadence of results this quarter? How are trends in July in particular given that data and then also the tariff rhetoric increasing during the month? I'm just curious as we went through the quarter how you guys were feeling.

Mike McMullin -- President and Chief Executive Officer

Great question. I saw that same article as well. Based on what we saw, it was having no impact. We saw no hesitancy in customers or any signals from our field that things were different.

Patrick Donnelly -- Goldman Sachs -- Analyst

Great. Thank you.

Operator

Thank you. Our next question will come from the line of Brandon Couillard with Jefferies. Your line is now open.

Brandon Couillard -- Jefferies -- Analyst

Good afternoon. Mike, looking at Europe, it was flat in the quarter. I realized you lapped a tough comp there, but you did so too in the second quarter as well. I'm just curious if you see any changes in the end markets, if you could give us a little more color on what you saw in that region.

Mike McMullin -- President and Chief Executive Officer

I think we did obviously have a tough comparer. I think it's probably fair to say the region is a little bit slower than it was last year, but it's not dramatically different. I wouldn't over-interpret the Q3 results. I even mentioned, "Didier, should we mention the World Cup?"

The reason why I say to not get overly worried about the third quarter result is I spent some time with our field teams and the European funnels look pretty good. The only thing we're keeping an eye on is whether this situation in Turkey could spread more broadly across Europe. Again, I think that no significant changes of our market environment in the third quarter and I wouldn't over-interpret the one quarter's results.

Brandon Couillard -- Jefferies -- Analyst

Thanks. I guess secondly, with the Alnylam approval now on the table, I would be curious how you're thinking about the next leg of capacity expansion at the NASD facility, when you might be in a position to pursue the next capacity buildout and what the indicators might be that might lead you to do that?

Mike McMullin -- President and Chief Executive Officer

Sure. Thanks for that question. We've already made the decision to make the investment. That decision was made probably about two years ago. This is a very unique capability we're adding to the company. It really, I think, speaks to the high barriers to entry and hopefully the kind of margins we expect to drive in this business. We made the decision based on our forecast of likely demand. I think the most recent announcement about Alnylam's success is one more proof point the market is going to be there for the products.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

As a complement, as you know, we're only firing up train A in the facility. As for train B, we are certainly not ready yet to push on the button there. But it's still an orphan drug. We're waiting for other confirmation that our customers will move into a commercial space and then we'll fire off train B. It's there, obviously at a much cheaper cost than the whole facility. We're certainly ready when we see the confirmation that a lot of our customers are bringing commercial products onto the market.

Mike McMullin -- President and Chief Executive Officer

Thanks for that additional insight, Didier. We're bringing on this one train, just to be clear, next year in second half '19 roughly, $100 million additional revenue, then we can bring on another $100 million or so with train B.

Brandon Couillard -- Jefferies -- Analyst

That's what I was referring to was the next train line.

Mike McMullin -- President and Chief Executive Officer

Didier picked up on that. I missed it. Sorry.

Brandon Couillard -- Jefferies -- Analyst

Very good. Thank you.

Operator

Thank you. Our next question will come from the line of Dan Leonard with Deutsche Bank. Your line is now open.

Dan Leonard -- Deutsche Bank -- Managing Director

Thank you. Maybe a couple more on China. First off, you heard all your peers report now. It does seem that the environmental and food headwinds are something that Agilent is uniquely calling out. Do you have any opinion on why? Is it a reflection of the product dynamic those customers are buying or maybe just some share in a micro basket of customers?

Mike McMullin -- President and Chief Executive Officer

I'm happy to share my thoughts here. There is something going on here that's unique to Agilent because we are uniquely the leader in ministries where the consolidation is occurring. That's why you're seeing Agilent calling this out, where others didn't have hardly any business there. We're the ones getting impacted the most from it. I think that's why you're hearing us call it out and other people are kind of rightfully not seeing it as a major issue.

There's nothing happening competitively in terms of share of new offerings. It really is a macro effect where we're really strong and we think this is going to be a temporary situation as things move out. Again, just to remind you, overall, China business grew double-digit for Agilent in the third quarter. It was the fastest-growing region we had in the company.

Dan Leonard -- Deutsche Bank -- Managing Director

That's helpful color. Then as a tariff-related follow-up. You mentioned a couple times that your remediation effort assumptions don't yet include pricing actions. Could you comment on your ability to get price on some of the affected product lines? Do you think you have pricing power? Would you expect that is a lever you could pull or not?

Mike McMullin -- President and Chief Executive Officer

As I indicated in my call, price is one area that you can use to offset the tariff impact. You would have to do something more broad-based as opposed to a 25% increase or whatever it may be on a core product platform. It will be broad-based and we think we have the ability to do that. Again, it comes back down to the differentiation of portfolio. If you have something truly of value that's differentiated from your competition, you're in a position to be able to do that. So, we're not overly concerned about our ability to mitigate the impact on the P&L on tariffs as they stand right now.

Dan Leonard -- Deutsche Bank -- Managing Director

Thanks for that color.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

It would take 0.02% increase on our $5 billion of revenue to offset the $9 million in net tariff impact.

Mike McMullin -- President and Chief Executive Officer

I'm glad you can do that math on that for me. Thanks.

Dan Leonard -- Deutsche Bank -- Managing Director

Appreciate that. Thank you.

Operator

Thank you. Our next question will come from the line of Ross Muken with Evercore ISI. Your line is now open.

Ross Muken -- Evercore ISI -- Managing Director

Hey, guys. I want to echo the view -- obviously, Didier, it's been a great time working with you. You've seen the business through quite a transformation. Then Bob, I know BJ is very jealous, but we'll look forward to spending more time with you as you get ramped.

Robert W. McMahon -- Incoming Chief Financial Officer

Thank you.

Ross Muken -- Evercore ISI -- Managing Director

Could we tease out pharma a little bit? It seems like performance has been better than maybe what you would have foreshadowed some time ago. It feels like there's a bit of share you take. Obviously, you call that the emerging market experience, but maybe on a product basis or any other way you want to cut it, give us a little bit of a feel for how you feel like you're performing there versus the peer group.

Mike McMullin -- President and Chief Executive Officer

Yeah, Ross. Thanks for the opportunity to comment on this. As you know, pharma being our largest market, this is really important for us. We often focus on this one product platform in this area, but the strength of Agilent is we have this broad-based portfolio. What we can see is particularly in the area of mass spectrometry gaining a lot of share both on the LC-MS side as well as there's a number of new regulations growing of ICP-MS into this space. So, we have a breadth of portfolio to go after those.

Then again, I'll ask Mark to make a few comments here, but I truly believe this CrossLab platform that we've developed really has allowed us to take outsized growth in this space -- you can start to see the numbers. They're starting to be quite significantly important to Agilent. Mark, if you could just maybe add a few comments about what you think maybe happened to your business in pharma.

Mark Doak -- Senior Vice President and President, CrossLab Group

Thanks, Mike. Maybe at top-level, the picture we're seeing really strong response in all aspects of our pharma business. I think we mentioned certain we invested in our chemistry business particularly to address the biopharma area. That part of the business is going very well, a lot of complementary pieces coming together in our chemistry business around the pharma space at large.

Then enterprise services, we continue to see strength in that area in pharma too. As we've mentioned many times, when they're looking for better productivity or improving some of the better management of the overall assets, we're seeing that. Moving into the smaller midsize pharmas and biopharma companies in general.

So, long-story short is it's been very sustainable. We've continued to see high single-digit growth over the past few years in the space. Our product portfolio will lend itself -- certainly, we're planning on keeping that momentum going.

Mike McMullin -- President and Chief Executive Officer

Ross, I'll just close off on this. I think Mark's been able to develop a scalable platform. So, the discussion before used to be only focused on large pharma, would the game be over. I think the platform is very scalable to the small and medium-sized pharma as well.

Ross Muken -- Evercore ISI -- Managing Director

That's helpful, Mike. Maybe one for Sam -- you've done some acquisitions. You closed out the Lasergen interest. It feels like you've got pretty good momentum in terms of M&A in your division. How are you feeling about the pipeline of things you have in front of you? It's probably the area where you have maybe the broadest set of things to bring in. From a product standpoint, particularly on the companion side, it seems like there's a couple things that could potentially go your say. How are you thinking about that business?

Mike McMullin -- President and Chief Executive Officer

Go ahead, Sam. I've been doing a lot of talking today.

Sam Raha -- Senior Vice President and President, Diagnostics and Genomics Group

Thanks for the question, Ross. Maybe I'll start in reverse with your questions. For our companion diagnostics business, we remain very excited about that. We are continuing to do work with the partners that are publicly known in terms of Merck and BMS. But beyond that, we've had a very active effort to increase what we're doing and develop companion diagnostics with new pharma partners as well as to expand the number of biomarkers. PD-L1 is very important. It's an area that we are continuing to focus on.

Mike McMullin -- President and Chief Executive Officer

I think you gave me some stats the other day of how many countries that was registered in and some of the new indications.

Sam Raha -- Senior Vice President and President, Diagnostics and Genomics Group

Absolutely. You're talking about PD-L1 in particular. The 22C3 variance of that, which is for Keytruda and Merck, we're now registered in over 83 countries for more than five indications. That's good progress and more to come on that. In response to your question, it's beyond that. We are working on a number of new biomarkers with a number of new partners. So, I think there is goodness to come that we are driving for the coming quarters and coming years.

Mike McMullin -- President and Chief Executive Officer

You had told me that because we're going to have to fill out that expansion we're doing to the site. We ran out of space.

Sam Raha -- Senior Vice President and President, Diagnostics and Genomics Group

Thank you for that. Didier, as a parting gift, we are expanding the footprint because the work is very real. It's more than a pipeline. It's things we're signing. Ross, with respect to your question on general pipeline, I think I had alluded to and actually mentioned analysts at investor day, even within our next generation sequencing series of products that we have something called MAGNIS, which we'll be introducing in early 2019, which is a platform which will automate, starting with DNA going to prepared libraries. We're excited about that.

That's just an example, but we continue to have new products and you'll see it coming out of both what's been our traditional diagnostic genomics group, but also now out of AATI. So, the pipeline will complement the market opportunities. We have a number of things we'll be able to share in the coming months and quarters.

Ross Muken -- Evercore ISI -- Managing Director

Excellent. Thank you.

Operator

Thank you. Our next question will come from Steve Willoughby with Cleveland Research. Your line is now open.

Steve Willoughby -- Cleveland Research Company -- Analyst

Hi, good evening. Thanks for taking my questions. A couple for you -- first, you made a comment regarding seeing good demand from both small molecule as well as biopharma customers. I just was wondering as it relates to the small molecule side, is that a change in the trend that you're seeing and where you're seeing that among your small molecule customers? It sounds to be pretty good demand.

Then secondly Mark or Didier, you outperformed your guidance in the quarter by a pretty decent amount. Assuming you had some insight on your orders, is it fair to assume you had stronger pacing at the latter part of the quarter in the month of July here?

Mike McMullin -- President and Chief Executive Officer

I'll take the first one. Steve, you're a great reader of the results and listener. When I first saw that -- we'd been expecting the growth rate would start to separate between biopharma and the small molecule segments of our overall pharma business. We saw strong performance in small molecule. We often tie that to liquid chromatography.

What's going on here are two things -- one is the overall demand for the ACG services and consumables, which Mark commented on earlier. That really is our small molecule customers may not be buying new LCs at the same rate they were, but we've seen a real expansion of our growth in services and consumables in our platforms as well as our competitors' platforms.

Then we also show in these numbers the demand that's coming with ICP-MS related to some of the USD regs. That's also driving some of the growth. I think the real story is the ACG platform. I think the comment was around the order pacing?

Didier Hirsch -- Senior Vice President and Chief Financial Officer

We always expect the third month of the quarter to be stronger than the other months. In the last two years, we've been a lot more linear than we used to be. So, there is nothing remarkable about this last month of the quarter.

Mike McMullin -- President and Chief Executive Officer

Probably relative to the orders, I just have to think Didier, Henrick's team did a fantastic job on the order to revenue conversion. I think we're getting a lot better at making that happen pretty quickly.

Steve Willoughby -- Cleveland Research Company -- Analyst

Okay. Thanks very much.

Operator

Thank you. Our next question will come from the line of Puneet Souda with Leerink Partners. Your line is now open.

Puneet Souda -- Leerink Partners -- Analyst

Hi, Mike. Thanks for taking the question. Congrats on the quarter. Didier, we will absolutely miss you. I welcome Bob. I wanted to touch just briefly, quickly on ICP-MS. Could you elaborate how much of -- I don't know if you've touched on this from the last quarter, there were shipment delays that were recognized in this quarter. What was the outside growth excluding those ICP-MS orders catchup? I just wanted to confirm if you saw any other similar revenue recognition in this quarter as well that could change expectations for the next quarter.

Mike McMullin -- President and Chief Executive Officer

I have to do the math, Didier, but I think it's relatively immaterial to the overall growth rate. It's about $3 million, I think.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

Yeah, maybe $5 million.

Mike McMullin -- President and Chief Executive Officer

I think it was relatively immaterial to the overall growth for LSAG in the quarter. What was the second question? Sorry, Puneet. No. We would have called those out if we had any of those. I would say the demand for that product continues to be quite strong. I think you can expect to hear us talking about ICP-MS in our fourth quarter call as well.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

In both pharma and semiconductor and environmental.

Mike McMullin -- President and Chief Executive Officer

Yeah. It's a hot product in some really hot markets right now.

Puneet Souda -- Leerink Partners -- Analyst

Okay. Great. Another question is on pharma -- I know that's been discussed a bit here, but just looking at your acquisitions, ProZyme, Ultra Scientific, and now what you're doing with the Allotrope with Open Lab. Help us understand high-level how you're thinking about the overall long-term pharma growth in LSAG and overall about the LC/MS business and your expectations there to deliver in this market. Help us understand how you see this evolving in a few years from now.

Mike McMullin -- President and Chief Executive Officer

Yeah, happy to do so, then I may invite Jacob in this conversation here about LC/MS. We see pharma, as we highlighted in our AID meeting, that's our largest market with some of the highest expected growth rates outside of clinical diagnostics for the company. This is an area of major focus for the company and we've talked about our solutions focus as a company. One of the reasons why we've been able to get the strong growth in biopharma is not just because of the great new LC/MS product we have.

We've been able to broaden our solutions offering. This is where Mark's play of the consumables come in to give us the chemistries around our platform. On the informatics front, we think so much of the value of the customers' experience with the company is going to be in informatics. We're a big believer in the importance of open standards and that's' why we highlighted Agilent being the first to market commercially.

This is something our customers are moving us here and some of our competitors prefer closed environments. We've always embraced universal connectivity, universal architecture. Philosophically, this lines up with our customer-focused strategy. We're delighted to be the first one in there. Jacob, maybe you have a few comments about the Allotrope play, but also about our aspirations in LC/MS as well.

Jacob Thaysen -- Senior Vice President and President, Life Sciences and Applied Markets

Yeah, thanks, Mike. Let me just start overall and echo what you're saying. We believe there's a great future for Agilent in the pharma opportunity. LC has always been a part. But LC/MS has certainly been an even bigger opportunity going forward. Also, we see it's based in the biopharma, where customers are looking for high performance, but also ease of use. Our advanced bio [inaudible] has certainly shown that and we have great success with that.

We also see that from an informatics perspective that our customers are looking for something that is a fast acquisition of information, ease of use, again, but also getting a full comprehensive overview of all the data in the lab. That's where Allotrope is very important to get data, a data standard across all the different modalities.

Further than that, where we have been strong at our Open Lab looking at the scientific information and controlling the hardware itself, now with the Genohm acquisition, we also have full insight on the sample itself. All these investments go into we see a great opportunity in pharma and the LC/MS is just getting started there.

Puneet Souda -- Leerink Partners -- Analyst

Okay. Great. Thank you.

Operator

Thank you. And our next question will come from the line of Jack Meehan with Barclays. Your line is now open.

Mike McMullin -- President and Chief Executive Officer

Hey, Jack.

Jack Meehan -- Barclays -- Analyst

Hey, Mike. Welcome, Bob. Didier, we'll miss you down in Miami.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

Thanks, Jack. I'll be spending some time there in the future.

Mike McMullin -- President and Chief Executive Officer

He wants an invitation to your conference, Jack.

Jack Meehan -- Barclays -- Analyst

If you'd like to swing in, you're welcome to. I wanted to focus on some of the recent acquisitions. If you could elaborate a little bit on your plan to scale some of your platforms -- if I look at the fourth quarter, you're calling for a little bit of a step up in the contribution. Is there a level you think these could contribute at, just the deals you've closed in 2019, at this point?

Mike McMullin -- President and Chief Executive Officer

Yeah. So, we believe these acquisitions we made are in fast-growing spaces. That was one of the primary rationales of why we went down the acquisitions. So, for example, you look at AATI. NGS is driving that growth. I think Didier, when we were in New York, we talked about these things growing probably 20% on their own. I think we're going to stick with those numbers. We just reviewed our acquisition portfolio with our board at the last board meeting. All of the deals we've done, they're growing in excess of 20%.

So, again, still, the core organic growth is driving the company, but we're adding on these faster-growing pieces. Over time, they're going to become even more material to the company's overall growth prospects. I think we're pretty excited about AATI and a couple of other things we've done. I think I'll just leave it there.

Jack Meehan -- Barclays -- Analyst

Yeah, that sounds good. Mike, I know chemical and energy is always the wildcard in the outlook, but could you walk us through each of the businesses, how they performed in the quarter and how you think the funnel is coming together there?

Mike McMullin -- President and Chief Executive Officer

Specific to the three business groups or specifically to chemical and energy? I want to make sure I got the question correct.

Jack Meehan -- Barclays -- Analyst

I guess the end markets within chemical and energy if we think about chemicals, E&P, and refining.

Mike McMullin -- President and Chief Executive Officer

Oh, thank you. Thanks for that clarification. Just as a reminder, we think of this segment across three areas -- refining, exploration, which is roughly 40% of the total, then the other 60% is chemicals, which also includes materials testing as well as our semiconductor-based business. All three of those segments are growing.

I would say the chemicals sector is growing faster, really driven by the investments we're seeing in the semiconductor and materials space. The good news here is all three segments are growing, which is not a situation we would have had a year ago, where some segments really were quite constrained. We see growth across all three of the subsegments with higher rates in the chemical/semi-con piece.

Jack Meehan -- Barclays -- Analyst

Great. Thanks, Mike.

Operator

Thank you. Our next question will come from the line of Derik de Bruin with Bank of America. Your lien is now open.

Mike McMullin -- President and Chief Executive Officer

Hi, Derik.

Operator

Derik, please check your mute button.

Derik de Bruin -- Bank of America Merrill Lynch -- Managing Director

Sorry, hi. Can you hear me?

Mike McMullin -- President and Chief Executive Officer

We sure can. There you are.

Derik de Bruin -- Bank of America Merrill Lynch -- Managing Director

Sorry about that mute. Just to follow-up on the M&A question -- I know you said $22 million is the contribution in Q4, I guess in total, what is the total amount of revenue that you've acquired this year?

Didier Hirsch -- Senior Vice President and Chief Financial Officer

That's a great question. So far, we are probably -- hold on a second.

Mike McMullin -- President and Chief Executive Officer

I'm trying to remember that number.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

I have a number off the top of my head, but I think it's better if I read the exact number somewhere.

Mike McMullin -- President and Chief Executive Officer

Do you want to go to question number two while Didier digs through his files here?

Didier Hirsch -- Senior Vice President and Chief Financial Officer

You still on mute?

Derik de Bruin -- Bank of America Merrill Lynch -- Managing Director

I'm still here. I'll follow-up another one -- it's also an acquisition question. I know it's a little bit early to start talking about '19, but I'm going to.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

I let you have a second question. I feel bad now.

Derik de Bruin -- Bank of America Merrill Lynch -- Managing Director

You've got deals. You've got currencies. You've got Lasergen. You've got tariffs. You've got a lot of stuff moving around. How do we think about op margin expansion in '19?

Mike McMullin -- President and Chief Executive Officer

I'll refer you back to our commitments made at the AID. We think we have no reason to move away from those commitments to be able to do those core margin expansions. That's how we're setting the plans inside the company and we're putting all the right -- we have a number of things in flight already to make sure we can get there.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

So, the answer to your question is with the acquisitions we've made this year, Luxcel, Genohm, AATI, Ultra Scientific, and ProZyme, those five acquisitions, we are at about $25 million for the fiscal year of 2018. Then for fiscal year -- Q4 alone will be around $17 million. So, you multiply by four to have the 2019 annualized number.

Mike McMullin -- President and Chief Executive Officer

I think we're just starting, probably in the early days of ramping these things. We're just getting a few months of revenue.

Didier Hirsch -- Senior Vice President and Chief Financial Officer

Yeah.

Derik de Bruin -- Bank of America Merrill Lynch -- Managing Director

That's helpful. Thank you.

Mike McMullin -- President and Chief Executive Officer

You're quite welcome.

Operator

Thank you. Our next question will come from the line of Dan Arias with Citigroup. Your line is now open.

Daniel Arias -- Citigroup -- Analyst

Afternoon, guys. Thanks for getting me in here. Mike, on the US chemicals and energy business, last quarter, you were kind of unsure about whether that might have been impacted by trade policies or whether that wasn't really seeing an impact. I guess looking back, do you feel like tariff considerations were at all a factor in Q2 as the discussion started to heat up? Maybe just on the overall outlook, is it fair to say that double-digits for the year is in the view? I know the comp in stuff is 4Q, but I think you could also not grow at all and still be at 7-8, just based on what you've done so far.

Mike McMullin -- President and Chief Executive Officer

Yeah. So, two comments -- on the first question, what I pointed out in the Q2 call was a longer deal cycle to close in the US. I can't scientifically prove it, but we thought there was a level of caution that this was the overall rhetoric in the environment. That's still there, but it hasn't changed.

That was my concern, as you know, in the last call that actually would go be much more constrained. That has not changed. So, the behavior we saw three or four months ago, basically, what I'm trying to communicate today is business as usual relative to the environment we had last quarter, which did change as a result of a lot of this discussion in the macro environment.

While I'm not going to guide specifically the C&E market for the fourth quarter, that would be our upside. It's within reason that we could hit those kinds of numbers.

Daniel Arias -- Citigroup -- Analyst

Okay. Thanks. Maybe just one more on the academic markets -- as you finish your year in that segment, are you assuming that you stay low single-digit range for 2Q/3Q or do you think you see some funds blowing and taking you a little higher? I know you said you're not guiding the segment, but maybe I'll take a shot there.

Mike McMullin -- President and Chief Executive Officer

I can give you directionally -- I think we'd expect to see some improvement over the Q3 number. Keep in mind, I think we're about 6% through the first three quarters of this year. Typically, Q4, I mentioned earlier the strength in China relative to government and then assuming that rationality stays place in Washington, we know we'll usually get a nice push in September with federal government. So, fundamentals look pretty solid there.

Daniel Arias -- Citigroup -- Analyst

Okay. Thanks so much.

Mike McMullin -- President and Chief Executive Officer

No problem.

Operator

Thank you. I'm showing no further questions in the queue at this time. At this time, it is my pleasure to hand the conference back over to Miss Alicia Rodriguez, Vice President of Investor Relations for some closing comments and remarks.

Alicia Rodriguez -- Vice President of Investor Relations 

Thank you, Brian and to everybody on the line, on behalf of the management team, thank you for joining us today. If you have any questions, feel free to give us a call at investor relations. Have a good day. Bye, bye.

Operator

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude our program and you may all disconnect. Everybody have a wonderful day.

Duration: 67 minutes

Call participants:

Alicia Rodriguez -- Vice President of Investor Relations 

Mike McMullin -- President and Chief Executive Officer

Didier Hirsch -- Senior Vice President and Chief Financial Officer

Jacob Thaysen -- Senior Vice President and President, Life Sciences and Applied Markets

Sam Raha -- Senior Vice President and President, Diagnostics and Genomics Group

Mark Doak -- Senior Vice President and President, CrossLab Group

Robert W. McMahon -- Incoming Chief Financial Officer

Steve Beuchaw -- Morgan Stanely -- Analyst

Tycho Peterson -- J.P. Morgan -- Managing Director

Doug Schenkel -- Cowen and Company -- Managing Director

Patrick Donnelly -- Goldman Sachs -- Analyst

Brandon Couillard -- Jefferies -- Analyst

Dan Leonard -- Deutsche Bank -- Managing Director

Ross Muken -- Evercore ISI -- Managing Director

Steve Willoughby -- Cleveland Research Company -- Analyst

Puneet Souda -- Leerink Partners -- Analyst

Jack Meehan -- Barclays -- Analyst

Derik de Bruin -- Bank of America Merrill Lynch -- Managing Director

Daniel Arias -- Citigroup -- Analyst

More A analysis

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