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Will Higher Revenues Benefit Keysight (KEYS) Q4 Earnings?

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Keysight Technologies, Inc. (KEYS - Free Report) is scheduled to report fourth-quarter fiscal 2022 results on Nov 17 after the market closes. In the last reported quarter, the company delivered an earnings surprise of 12.3%. It pulled off a trailing four-quarter earnings surprise of 9.3%, on average. The Santa Rosa, CA-based electronic design company is expected to have recorded year-over-year higher revenues due to increased sales from the Communications Solutions Group and Electronic Industrial Solutions Group.

Factors at Play

In the fiscal fourth quarter, Keysight collaborated with Flexium Interconnect, Inc. to augment its product portfolio in tune with the evolving demand patterns. The partnership aims to improve millimeter-wave modules and material test accuracy and efficiency as demand for millimeter wave is gradually rising. The collaboration intends to accelerate advanced designs in high-frequency and multi-layer antenna modules and explore related opportunities within autonomous vehicles.

During the to-be-reported quarter, Keysight collaborated with Jiyun Technologies as part of its concerted efforts to shift to e-mobility for commercial vehicles. The partnership will likely help accelerate the development and improvement of battery cells for electric vehicles (EVs) for customized battery life optimization and key actionable insights. Such collaborations are likely to be reflected in the upcoming results.

In the fiscal fourth quarter, the company announced that Scania, part of Volkswagen Group, will deploy its Scienlab test systems at its research and development facility in Sweden as part of the latter’s efforts to shift to e-mobility for commercial vehicles. The comprehensive test solutions will likely help accelerate the development and improvement of battery cells for electric vehicles for customized battery life optimization and key actionable insights. The consensus estimate for revenues from Electronic Industrial Solutions Group stands at $407 million, which implies an increase from $375 million reported a year ago.

During the quarter, Keysight collaborated with Nokia to successfully demonstrate the first public 800GE test to validate the readiness of next-generation optics for service providers and network operators. It also announced that Xiaomi selected its 5G device test solutions to accelerate 5G Release 16 device validation for the latest 3GPP 5G new radio features and specifications. The consensus estimate for revenues from Communications Solutions Group stands at $988 million, which implies an increase from $919 million reported a year ago.

For the September quarter, the Zacks Consensus Estimate for total revenues is pegged at $1,400 million, which indicates growth of 8.2% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share stands at $1.99, suggesting an increase of 9.3% year over year.

Earnings Whispers

Our proven model does not predict an earnings beat for Keysight in the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.99. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Keysight Technologies Inc. Price and EPS Surprise

Keysight Technologies Inc. Price and EPS Surprise

Keysight Technologies Inc. price-eps-surprise | Keysight Technologies Inc. Quote

Zacks Rank: Keysight has a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Zoom Video Communications, Inc. (ZM - Free Report) is set to release quarterly numbers on Nov 21. It has an Earnings ESP of +0.27% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Intuit Inc. (INTU - Free Report) is +3.15% and it carries a Zacks Rank of 3. The company is set to report quarterly numbers on Nov 29.

The Earnings ESP for Analog Devices, Inc. (ADI - Free Report) is +1.10% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Nov 22.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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