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Keysight (KEYS) To Report Q4 Earnings: What's in the Offing?
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Keysight Technologies, Inc. (KEYS - Free Report) is scheduled to release fourth-quarter fiscal 2020 results on Nov 18.
For fourth-quarter fiscal 2020, the company expects revenues to be $1.17-$1.19 billion. The guidance includes impact from ongoing coronavirus crisis. The Zacks Consensus Estimate for revenues is currently pegged at $1.18 billion, indicating an improvement of 5.6% from the prior-year quarter.
Non-GAAP earnings per share are projected to be $1.42-$1.48. The consensus for earnings has been steady at $1.46 per share over the past 30 days, suggesting growth of 9.8% from the year-ago reported figure.
Keysight has been improving production and services operations and anticipated returning to 100% capacity by the end of the fiscal fourth quarter despite persistent supply chain challenges.
Notably, the company beat estimates in three of the trailing four quarters and missed the same once. It has a trailing four-quarter earnings surprise of 12.26%, on average.
Keysight’s fiscal fourth-quarter results are likely to reflect gains from solid momentum in chip design activity. Robust uptake of the company’s semiconductor measurement solutions on the back of allegiance of semiconductor companies to develop chips on next-generation process technologies is expected to have benefited fiscal fourth-quarter performance.
Growing clout of high-speed networking, smartphone processors, and high-performance data center applications is driving the demand for the company’s solutions in process node technology testing, and momentum in first-to-market solutions. This may have contributed to the fiscal fourth-quarter performance.
Additionally, growing usage of electronics-based testing equipment across medical devices and pharmaceutical markets might have benefited the performance in the quarter to be reported. Moreover, as employees are compelled to work from home due to the coronavirus pandemic, there has been an increasing demand for high-speed connectivity, which is expected to have bolstered adoption of the company’s 5G testing solutions. This might get reflected in the fiscal fourth-quarter results.
Notably, shares of the company have gained 12.5% in year to date, compared with the industry’s growth of 11.3%.
Further, solid order growth in the wireless ecosystem primarily fueled by advancement in 5G investment and robust adoption of Ixia’s Network Applications & Security solutions may get reflected in Communications Solutions Group (CSG) fiscal fourth-quarter revenues.
Also, recovery in automotive sector, as economies reopen and lockdowns eased, may have contributed to CSG revenues. Notably, the Zacks Consensus Estimate for CSG is pegged at $911 million, compared with $760 million in the fiscal third quarter.
Markedly, Keysight is strengthening its product portfolio with a focus on augmenting software testing capabilities. During the fiscal third quarter, Keysight had concluded the acquisition of Eggplant from The Carlyle Group in a bid to drive software test automation capabilities. During the quarter under review, the company unveiled cloud-based distributed network performance and security test software — CyPerf. (Read More: Keysight to Gain From Momentum in Software Offerings)
It must be noted that the robust growth in Software and services revenues, which represented more than 30% of total revenues in third-quarter fiscal 2020, is driving Keysight’s business model, bolstering recurring revenue growth and leading to expansion in gross margins.
Likewise, momentum in the company’s latest innovative PathWave Test 2021 software and latest support solutions, including Keysight Care, is expected to have aided margin expansion in the fiscal fourth quarter.
However, softness in spending across aerospace end-market is likely to have impeded growth in Electronic Industrial Solutions Group (EISG) segmental revenues. Notably, the Zacks Consensus Estimate for EISG revenues stands at $270 million, compared with prior-quarter reported figure of $251 million.
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Keysight (KEYS) To Report Q4 Earnings: What's in the Offing?
Keysight Technologies, Inc. (KEYS - Free Report) is scheduled to release fourth-quarter fiscal 2020 results on Nov 18.
For fourth-quarter fiscal 2020, the company expects revenues to be $1.17-$1.19 billion. The guidance includes impact from ongoing coronavirus crisis. The Zacks Consensus Estimate for revenues is currently pegged at $1.18 billion, indicating an improvement of 5.6% from the prior-year quarter.
Non-GAAP earnings per share are projected to be $1.42-$1.48. The consensus for earnings has been steady at $1.46 per share over the past 30 days, suggesting growth of 9.8% from the year-ago reported figure.
Keysight has been improving production and services operations and anticipated returning to 100% capacity by the end of the fiscal fourth quarter despite persistent supply chain challenges.
Notably, the company beat estimates in three of the trailing four quarters and missed the same once. It has a trailing four-quarter earnings surprise of 12.26%, on average.
Keysight Technologies Inc. Price and EPS Surprise
Keysight Technologies Inc. price-eps-surprise | Keysight Technologies Inc. Quote
Factors At Play
Keysight’s fiscal fourth-quarter results are likely to reflect gains from solid momentum in chip design activity. Robust uptake of the company’s semiconductor measurement solutions on the back of allegiance of semiconductor companies to develop chips on next-generation process technologies is expected to have benefited fiscal fourth-quarter performance.
Growing clout of high-speed networking, smartphone processors, and high-performance data center applications is driving the demand for the company’s solutions in process node technology testing, and momentum in first-to-market solutions. This may have contributed to the fiscal fourth-quarter performance.
Additionally, growing usage of electronics-based testing equipment across medical devices and pharmaceutical markets might have benefited the performance in the quarter to be reported. Moreover, as employees are compelled to work from home due to the coronavirus pandemic, there has been an increasing demand for high-speed connectivity, which is expected to have bolstered adoption of the company’s 5G testing solutions. This might get reflected in the fiscal fourth-quarter results.
In fact, deal wins from Jabil (JBL - Free Report) , QUALCOMM Incorporated (QCOM - Free Report) , NVIDIA (NVDA - Free Report) , MediaTek, Baicells Technologies, Mavenir, deserve a special mention, in this regard. Strong adoption of the company’s offerings is expected to instill investor confidence in this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Notably, shares of the company have gained 12.5% in year to date, compared with the industry’s growth of 11.3%.
Further, solid order growth in the wireless ecosystem primarily fueled by advancement in 5G investment and robust adoption of Ixia’s Network Applications & Security solutions may get reflected in Communications Solutions Group (CSG) fiscal fourth-quarter revenues.
Also, recovery in automotive sector, as economies reopen and lockdowns eased, may have contributed to CSG revenues. Notably, the Zacks Consensus Estimate for CSG is pegged at $911 million, compared with $760 million in the fiscal third quarter.
Markedly, Keysight is strengthening its product portfolio with a focus on augmenting software testing capabilities. During the fiscal third quarter, Keysight had concluded the acquisition of Eggplant from The Carlyle Group in a bid to drive software test automation capabilities. During the quarter under review, the company unveiled cloud-based distributed network performance and security test software — CyPerf. (Read More: Keysight to Gain From Momentum in Software Offerings)
It must be noted that the robust growth in Software and services revenues, which represented more than 30% of total revenues in third-quarter fiscal 2020, is driving Keysight’s business model, bolstering recurring revenue growth and leading to expansion in gross margins.
Likewise, momentum in the company’s latest innovative PathWave Test 2021 software and latest support solutions, including Keysight Care, is expected to have aided margin expansion in the fiscal fourth quarter.
However, softness in spending across aerospace end-market is likely to have impeded growth in Electronic Industrial Solutions Group (EISG) segmental revenues. Notably, the Zacks Consensus Estimate for EISG revenues stands at $270 million, compared with prior-quarter reported figure of $251 million.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
These 7 were selected because of their superior potential for immediate breakout.
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