The banner of "restructuring" can hide a multitude of sins -- but Agilent (NYSE:A) seems to have few sins to hide. This supplier of electronic test equipment and life sciences analysis equipment (and former subsidiary of Hewlett-Packard (NYSE:HPQ)) has been focusing on what it does best and shedding the rest. The apparent result: a stronger company.

Revenue was up 12% this quarter, with sales rising 8% in the bioanalytical business and 4% in electronic measurement, buttressed by the Verigy semiconductor test business. It should be noted, though, that the company is in registration on Verigy, so there weren't many solid details about its operations.

Gross margins improved across the businesses, and the company really kept a lid on growth in R&D and SG&A expenses. That led to strong operating income growth, and Agilent was solidly positive in free cash flow this quarter.

Shedding the Verigy business seems like a mixed blessing. The sale will make the company more focused on its core businesses and somewhat less cyclical. It should also generate a fair bit of cash, which can then be distributed to shareholders or used to build the business through a select acquisition or two.

On the other hand, the underlying long-term growth in the bioanalytical and electronic-measurement space probably won't be huge. These are more or less mature markets, and competitors like Waters (NYSE:WAT) and Thermo Electron (NYSE:TMO) don't plan to forgo their own growth.

This company sports better-than-20% returns on invested capital (by its own calculations) in generally stable businesses, and it's still in the process of slimming down. When you add in the apparent double-digit undervaluing of the stock, I have to admit I'm a little curious about it.

Further lean and mean Foolishness:

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).