Last quarter, I opined that Agilent Technologies (NYSE: A) was making all the right moves. The maker of measurement instruments sold off one division to networker JDS Uniphase (Nasdaq: JDSU) and bought medical tester Varian, thus repositioning itself in the industry with potentially higher margins and growth opportunities to follow.

Here we are three months later, and it looks like I was right. The Varian acquisition and the network testing sale worked out to accelerated sales growth, and Agilent is absolutely crushing its old profit levels. Revenues shot up by 35% year over year to $1.6 billion, and non-GAAP earnings more than doubled to $0.65 per share.

And that's not all the good news:

  • Orders are flowing in faster than Agilent is filling and billing them, which gives the company great visibility into future trends.
  • Higher sales are great and all, but Agilent is also keeping a tight lid on expenses. That's not always easy to do while you're integrating a new acquisition into your business.
  • Return on invested capital (ROIC) expanded from 18% to 24%, which is a sign that management is squeezing more value out of its financial assets.
  • Free cash flow came in 44% stronger than net income. That's smart tax management, and also shows that Agilent has plenty of cash-producing muscle available. As most Fools would agree, cash is king. Agilent's cash king margin is now a healthy 10.9%, getting closer other equipment maker Thermo Fisher Scientific (NYSE: TMO) and leaving Beckman Coulter (NYSE: BEC) further behind.

According to CEO Bill Sullivan, this quarter saw "the completion of Agilent's transformation, a milestone in our company's history." The average investor appears to agree, as Agilent's stock has risen by 28% over the last three months.

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. Thermo Fisher Scientific is a Motley Fool Inside Value pick. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.