Soon to be just a measurement company, Agilent (NYSE:A) showed investors that it can turn assets into hard cash. The company is selling its semiconductor business (26.7% of sales and profits in the company's third quarter) for $2.66 billion.

Also being sold for $950 million (plus a $50 million repayment of debt) is the company's 47% stake in Lumileds Lighting, a company that can trace its roots back to the optoelectronics division of Hewlett-Packard (NYSE:HPQ). Lumileds is currently a joint venture with the Philips Lighting division of Royal Philips Electronics (NYSE:PHG), the world largest seller of lightbulbs.

If that weren't enough, the company also said that it plans to spin off its system-on-a-chip and memory-test businesses as soon as possible in 2006.

The already cash-rich company will be using these latest cash infusions to make a number of moves to enhance shareholder value. The company is going to repurchase $4 billion of its own stock, and it will call its $1.15 billion in convertible debt, a move that might reduce shares outstanding by 36 million.

Lost in all this news were the company's Q3 results, which were, in a word, lackluster. Revenue declined 10%, net income inched ahead 4%, and orders moved by a minuscule 1%. Still, the company managed to produce $85 million in free cash flow, and the company ended the quarter with $2.8 billion in cash.

Agilent's move in semiconductors makes sense. It's a market increasingly dominated by giants and partnerships. Agilent, while still comparatively small, is making its exit at an opportune time. Orders for its semiconductors are up by 25% compared with the third quarter last year and have risen 8% sequentially -- allowing the company to curry a decent price for its assets.

The Lumileds move makes sense, too. Although I believe LED business has a bright future, its lighting and display technology focus are a close strategic fit for Philips. Exiting the business allows Agilent to get the cash (again, at an opportune time) while focusing on its core test and measurement market.

Quaking on the sidelines should be test and measurement (T&M) company Tektronix (NYSE:TEK). Although debt-free and with $252 million in cash, Tektronix is not the gorilla in T&M -- Agilent is, and it is in fighting shape, with a clear focus on the $40 billion T&M marketplace.

Agilent's stock was up by about 15% in afternoon trading. But investors should take notice that the stock is trading for 40 times trailing earnings. That's a gigantic premium to its T&M competitor Tektronix, which is tipping the scale at only 26 times earnings. Consider, too, that Agilent T&M revenue and orders fell 6% from the comparable year-ago quarter. The stock, at current prices, is showing strength for business momentum that is not currently evident.

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Fool contributor W.D. Crotty does not own shares in any of the companies mentioned, though he did work for Tektronix ages ago. Click here to see The Motley Fool's disclosure policy.