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What's in the Offing for Keysight (KEYS) in Q3 Earnings?
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Keysight Technologies Inc. (KEYS - Free Report) is set to release third-quarter fiscal 2018 results on Aug 21. The company has delivered positive earnings surprises in three of the trailing four quarters, recording an average beat of 10.4%.
In second-quarter fiscal 2018, the company reported non-GAAP earnings of 83 cents per share matching the Zacks Consensus Estimate. However, the figure increased 29.7% from the year-ago quarter.
Net revenues surged 31.5% from the year-ago quarter to $990 million and surpassed the Zacks Consensus Estimate of $963 million. Non-GAAP core revenues (excluding the impact of currency and revenues from acquisitions completed within the last 12 months) increased 18% year over year to $999 million.
Guidance & Estimates
For the third quarter of fiscal 2018, the company expects non-GAAP revenues to be in the range of $942-$972 million. Non-GAAP earnings per share for the third quarter are projected in the range of 72-82 cents per share.
The Zacks Consensus Estimate for revenues and earnings are pegged at $959 million and 80 cents per share, respectively.
The stock has gained 49.9% year over year, outperforming the 42.5% rally of the industry it belongs to.
Let’s see how things are shaping up for this announcement.
Factor Likely to Impact Q3 Results
The company’s continuous focus on launching new solutions for growth markets like 5G, Internet of Things (IoT), next-generation wireless, high-speed datacenters and automotive & energy bodes well for its top-line.
The company’s partnerships with the likes of Verizon Communications Inc and Qualcomm Technologies, Inc., a subsidiary of Qualcomm (QCOM - Free Report) are aiding it to achieve 5G commercialization related milestones.
Keysight stated that orders for 5G solutions recorded double-digit growth year over year for the 10th consecutive quarter. Additionally, the buyouts of Ixia, Anite and AT4 Wireless have enriched the company’s 5G solutions portfolio.
In a bid to expand foothold in the defense and security space, Keysight recently announced the acquisition of Melbourne, Australia-based Thales Calibration Services, a subsidiary of Thales Group. The buyout is likely to expand the company’s current electrical portfolio, paving the way for new prospects to support the defense sector in Australia.
Moreover, IoT also presents significant growth opportunity based on the company’s broad and diverse portfolio that effectively addresses the needs of customers related to power consumption, RF performance, interoperability and conformance testing.
The growing demand for electric and hybrid cars also bode well for the company’s product portfolio, which was enhanced with the acquisition of Scienlab.
Further, increasing electronic content in vehicles, radar technologies for autonomous driving and high-power devices as well as applications are driving demand for the company’s solutions in this end market. The company’s recently inaugurated Detroit-based Automotive Solution Center remains another positive.
We believe that the company's focus on expanding its software portfolio on the back of strong demand for its solutions is likely fuel growth. This along with key acquisitions in line with company's goals amplifies its growth prospects.
However, competition from Rohde & Schwarz GmbH & Co. KG, Anritsu Corporation, and Fortive Corporation, remains a headwind.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Keysight has a Zacks Rank #3 and an Earnings ESP is 0.00%.
Stocks With Favorable Combination
Here are a couple of companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:
Splunk Inc. has an Earnings ESP of +57.41% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
What's in the Offing for Keysight (KEYS) in Q3 Earnings?
Keysight Technologies Inc. (KEYS - Free Report) is set to release third-quarter fiscal 2018 results on Aug 21. The company has delivered positive earnings surprises in three of the trailing four quarters, recording an average beat of 10.4%.
In second-quarter fiscal 2018, the company reported non-GAAP earnings of 83 cents per share matching the Zacks Consensus Estimate. However, the figure increased 29.7% from the year-ago quarter.
Net revenues surged 31.5% from the year-ago quarter to $990 million and surpassed the Zacks Consensus Estimate of $963 million. Non-GAAP core revenues (excluding the impact of currency and revenues from acquisitions completed within the last 12 months) increased 18% year over year to $999 million.
Guidance & Estimates
For the third quarter of fiscal 2018, the company expects non-GAAP revenues to be in the range of $942-$972 million. Non-GAAP earnings per share for the third quarter are projected in the range of 72-82 cents per share.
The Zacks Consensus Estimate for revenues and earnings are pegged at $959 million and 80 cents per share, respectively.
The stock has gained 49.9% year over year, outperforming the 42.5% rally of the industry it belongs to.
Let’s see how things are shaping up for this announcement.
Factor Likely to Impact Q3 Results
The company’s continuous focus on launching new solutions for growth markets like 5G, Internet of Things (IoT), next-generation wireless, high-speed datacenters and automotive & energy bodes well for its top-line.
The company’s partnerships with the likes of Verizon Communications Inc and Qualcomm Technologies, Inc., a subsidiary of Qualcomm (QCOM - Free Report) are aiding it to achieve 5G commercialization related milestones.
Keysight stated that orders for 5G solutions recorded double-digit growth year over year for the 10th consecutive quarter. Additionally, the buyouts of Ixia, Anite and AT4 Wireless have enriched the company’s 5G solutions portfolio.
In a bid to expand foothold in the defense and security space, Keysight recently announced the acquisition of Melbourne, Australia-based Thales Calibration Services, a subsidiary of Thales Group. The buyout is likely to expand the company’s current electrical portfolio, paving the way for new prospects to support the defense sector in Australia.
Moreover, IoT also presents significant growth opportunity based on the company’s broad and diverse portfolio that effectively addresses the needs of customers related to power consumption, RF performance, interoperability and conformance testing.
The growing demand for electric and hybrid cars also bode well for the company’s product portfolio, which was enhanced with the acquisition of Scienlab.
Further, increasing electronic content in vehicles, radar technologies for autonomous driving and high-power devices as well as applications are driving demand for the company’s solutions in this end market. The company’s recently inaugurated Detroit-based Automotive Solution Center remains another positive.
We believe that the company's focus on expanding its software portfolio on the back of strong demand for its solutions is likely fuel growth. This along with key acquisitions in line with company's goals amplifies its growth prospects.
However, competition from Rohde & Schwarz GmbH & Co. KG, Anritsu Corporation, and Fortive Corporation, remains a headwind.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Keysight has a Zacks Rank #3 and an Earnings ESP is 0.00%.
Stocks With Favorable Combination
Here are a couple of companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:
Redhill Biopharma Ltd. (RDHL - Free Report) , with an Earnings ESP of +3.19% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Splunk Inc. has an Earnings ESP of +57.41% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>