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Will Revenue Growth Boost Keysight's (KEYS) Q3 Earnings?
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Keysight Technologies, Inc. (KEYS - Free Report) is set to report third-quarter fiscal 2023 results on Aug 17, after market close. In the last reported quarter, the company delivered an earnings surprise of 9.28%. It pulled off a trailing four-quarter earnings surprise of 9.58%, on average.
The company is expected to report higher revenues year over year, backed by healthy demand trends for electronic design and test solutions. Its approach of collaborating with leading organizations to accelerate innovation and strategic buyouts is strengthening its portfolio and is likely to have supported the top line during the quarter.
Factors at Play
In the fiscal third quarter, Keysight collaborated with Nokia Bell Labs to test the propagation characteristics of the sub-terahertz (sub-THz) spectrum that is essential for 6G networks. The analysis is likely to have sowed the seeds of innovative software and hardware offerings for the seamless transition to superfast data speed, ultra-low latency and near-infinite bandwidth of 6G networks. Keysight also expanded its autonomous driving validation test solutions with the launch of the E8717A Lidar Target Simulator. These developments are likely to have contributed to top-line growth in the quarter.
During the quarter, Keysight unveiled a new software solution for RF calibration and verification testing procedures. The newly introduced solution in the company’s PathWave Test Executive for Manufacturing Developer Version now effectively automates and simplifies the intricate testing process, primarily catering to the requirements of automotive manufacturers.
It also partnered with Samsung Foundry to revolutionize the workflow automation process. Through the adoption of Keysight's IC-CAP Model Generator, Samsung Foundry aims to accelerate the creation of circuit libraries, a vital component of process design kits for their advanced radio frequency (RF) semiconductor process technologies.
In the quarter-under-review, KEYS inked an agreement to acquire a controlling stake in the French software company, ESI Group. The transaction is valued at $995.81 million. The strategic buyout will significantly augment Keysight’s software prototyping capabilities and enable it to provide software-centric solutions with advanced virtual prototyping and simulation. The portfolio expansion is likely to strengthen its position in the industry.
In the fiscal third quarter, Keysight introduced PathWave Design 2024. This latest suite of EDA software tools aims to address the challenges faced by design organizations in the semiconductor and electronics industry.
The company also unveiled AresONE-M 800GE, a comprehensive multi-speed Ethernet performance test platform, designed to support network engineers with advanced capabilities. The solution offers the most comprehensive DCI (data center interconnects) speeds, ranging from 10 GE to 800GE, within a single test platform that supports all required forward error correction types with in-depth link tuning, stability, reliability and performance measurement statistics. Such initiatives are likely to have boosted the top line during the quarter.
Our estimate for Electronic Industrial Solutions Group segment is pegged at $432.2 million, indicating 6.5% year-over-year growth. Our estimate for Communications Solutions Group segment is pegged at $946.9 million.
For the July quarter, the Zacks Consensus Estimate for total revenues is pegged at $1,382 million, up from $1,376 million reported in the prior-year quarter. The consensus estimate for adjusted earnings per share stands at $2.04, suggesting an increase from the prior-year quarter’s figure of $2.01.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Keysight in the fiscal third 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 -0.74%. The Most Accurate Estimate is pegged at $2.03 while the Zacks Consensus Estimate stands at $2.04. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are a few 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:
NVIDIA Corporation (NVDA - Free Report) has an Earnings ESP of +5.56% and sports a Zacks Rank of 1. The company is scheduled to report quarterly numbers on Aug 23.
On Holding (ONON - Free Report) has an Earnings ESP of +11.60% and sports a Zacks Rank of 1. The company is set to report its quarterly numbers on Aug 15.
Image: Bigstock
Will Revenue Growth Boost Keysight's (KEYS) Q3 Earnings?
Keysight Technologies, Inc. (KEYS - Free Report) is set to report third-quarter fiscal 2023 results on Aug 17, after market close. In the last reported quarter, the company delivered an earnings surprise of 9.28%. It pulled off a trailing four-quarter earnings surprise of 9.58%, on average.
The company is expected to report higher revenues year over year, backed by healthy demand trends for electronic design and test solutions. Its approach of collaborating with leading organizations to accelerate innovation and strategic buyouts is strengthening its portfolio and is likely to have supported the top line during the quarter.
Factors at Play
In the fiscal third quarter, Keysight collaborated with Nokia Bell Labs to test the propagation characteristics of the sub-terahertz (sub-THz) spectrum that is essential for 6G networks. The analysis is likely to have sowed the seeds of innovative software and hardware offerings for the seamless transition to superfast data speed, ultra-low latency and near-infinite bandwidth of 6G networks. Keysight also expanded its autonomous driving validation test solutions with the launch of the E8717A Lidar Target Simulator. These developments are likely to have contributed to top-line growth in the quarter.
During the quarter, Keysight unveiled a new software solution for RF calibration and verification testing procedures. The newly introduced solution in the company’s PathWave Test Executive for Manufacturing Developer Version now effectively automates and simplifies the intricate testing process, primarily catering to the requirements of automotive manufacturers.
It also partnered with Samsung Foundry to revolutionize the workflow automation process. Through the adoption of Keysight's IC-CAP Model Generator, Samsung Foundry aims to accelerate the creation of circuit libraries, a vital component of process design kits for their advanced radio frequency (RF) semiconductor process technologies.
In the quarter-under-review, KEYS inked an agreement to acquire a controlling stake in the French software company, ESI Group. The transaction is valued at $995.81 million. The strategic buyout will significantly augment Keysight’s software prototyping capabilities and enable it to provide software-centric solutions with advanced virtual prototyping and simulation. The portfolio expansion is likely to strengthen its position in the industry.
In the fiscal third quarter, Keysight introduced PathWave Design 2024. This latest suite of EDA software tools aims to address the challenges faced by design organizations in the semiconductor and electronics industry.
The company also unveiled AresONE-M 800GE, a comprehensive multi-speed Ethernet performance test platform, designed to support network engineers with advanced capabilities. The solution offers the most comprehensive DCI (data center interconnects) speeds, ranging from 10 GE to 800GE, within a single test platform that supports all required forward error correction types with in-depth link tuning, stability, reliability and performance measurement statistics. Such initiatives are likely to have boosted the top line during the quarter.
Our estimate for Electronic Industrial Solutions Group segment is pegged at $432.2 million, indicating 6.5% year-over-year growth. Our estimate for Communications Solutions Group segment is pegged at $946.9 million.
For the July quarter, the Zacks Consensus Estimate for total revenues is pegged at $1,382 million, up from $1,376 million reported in the prior-year quarter. The consensus estimate for adjusted earnings per share stands at $2.04, suggesting an increase from the prior-year quarter’s figure of $2.01.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Keysight in the fiscal third 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 -0.74%. The Most Accurate Estimate is pegged at $2.03 while the Zacks Consensus Estimate stands at $2.04. 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-eps-surprise | Keysight Technologies Inc. Quote
Zacks Rank: Keysight has a Zacks Rank #2 (Buy).
Stocks to Consider
Here are a few 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:
Legend Biotech (LEGN - Free Report) is set to release its quarterly numbers on Aug 15. It has an Earnings ESP of +8.26% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVIDIA Corporation (NVDA - Free Report) has an Earnings ESP of +5.56% and sports a Zacks Rank of 1. The company is scheduled to report quarterly numbers on Aug 23.
On Holding (ONON - Free Report) has an Earnings ESP of +11.60% and sports a Zacks Rank of 1. The company is set to report its quarterly numbers on Aug 15.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.