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Keysight Technologies Inc. (KEYS - Free Report) delivered fourth-quarter fiscal 2018 non-GAAP earnings of $1.01 per share beating the Zacks Consensus Estimate of 84 cents per share. Further, the figure increased 42.3% from the year-ago quarter.
GAAP revenues surged 19% from the year-ago quarter to $1.047 billion. Non-GAAP revenues increased 16% year over year to $1.051 billion. Non-GAAP core revenues (excluding the impact of currency and revenues from acquisitions completed within the last 12 months) increased 17% year over year. The Zacks Consensus Estimate is pegged at $1.017 billion
Orders grew 9% year over year to $1.1 billion during the quarter. Notably, core orders grew 10%. Management was positive about tapping key growth segments of a number of end markets. The company’s focus on launching new solutions for growth markets like 5G, Internet of Things (IoT), next-generation wireless, high-speed datacenters and automotive & energy are key catalysts.
Notably, robust demand along with higher investments in emerging technologies drove order growth during the quarter in markets such as solutions and commercial communications, aerospace, defense and semiconductor and services.
Notably, shares of the company went up more than 5% in after-hours trading. Shares of the Keysight have gained 30.7% on a year-to-date basis, against the industry’s decline of 10.8%.
Quarter Details
Communications Solutions Group (“CSG”) includes commercial communications (“CC”) and aerospace, defense & government (“ADG”) end markets. Revenues climbed 23% to $566 million.
CC revenues increased year over year driven by research and development (R&D) solutions related to technologies like 5G, 400G LTE-Advanced and Wi-Fi testing. ADG revenues grew 15% for the fourth consecutive quarter.
Keysight stated that orders for 5G solutions recorded tripple-digit growth year over year for the quarter. Keysight boasts of a robust 5G portfolio comprising comprehensive set of test and design solutions enabling telecom companies in accelerating 5G deployment.
The company recently inked Memorandum of Understanding (MoU) with Korea-based SK Telecom. The collaboration is primarily aimed at design development of 5G devices including performance validation and verification of technologies The company’s acquisitions of Anite and AT4 Wireless have further enriched the company’s 5G solutions portfolio.
Additionally, Keysight also announced extended collaboration with China Telecom in a bid to facilitate deployment of 5G on a commercial scale. Keysight’s robust 5G new radio (“NR”) network emulation offerings will enable trials for China Telecom’s 5G NR devices.
We believe adoption of company’s 5G testing and design solutions are anticipated to bolster top-line growth. The new collaborations are likely to enable the company in expanding presence in Asia Pacific.
Electronic Industrial Solutions Group (“EISG”) revenues increased 21% to $249 million. Automotive and Energy was the key catalyst for this segment.
Ixia Solutions Group (“ISG”) reported revenues of $115 million, down 7.3% year over year on the back of adverse impact by the contract manufacturing transition.
However, strong demand for the company’s high-speed Ethernet based testing solutions as well as its security and application solutions were key positives.
Services Solutions Group (“SSG”) revenues were $121 million, up 10%. Calibration services and increased sales of remarketed solutions drove year-over-year growth.
Gross margin during the reported quarter came in at 61%, on the back of favorable product mix and addition of Ixia. Operating margin expanded 90 bps quarter over quarter to 22.3%.
Balance Sheet & Cash Flow
Keysight ended the quarter with cash & cash equivalents of $913 million, down from the previous quarter of $1.34 billion. Long-term debt came in at $1.29 billion compared with $1.79 billion reported in the previous quarter. Cash flow from operations during the quarter came in at $235 million, while free cash flow was $201 million.
During the quarter, the company repurchased approximately 634,000 shares for a total of $40 million.
Guidance
For the first-quarter of fiscal 2019, the company expects non-GAAP revenues to be in the range of $965-$985 million. The Zacks Consensus Estimate for revenues is pegged at $947.5 million.
Non-GAAP earnings per share for first-quarter fiscal 2019 are projected in the range of 76-82 cents per share. The Zacks Consensus Estimate for revenues is pegged at 72 cents per share.
Infineon Technologies, QUALCOMM and Castlight Health have a long-term expected EPS growth rate of 8.6%, 11.5% and 22.5%, respectively.
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Keysight (KEYS) Q4 Earnings & Revenues Surpass Estimates
Keysight Technologies Inc. (KEYS - Free Report) delivered fourth-quarter fiscal 2018 non-GAAP earnings of $1.01 per share beating the Zacks Consensus Estimate of 84 cents per share. Further, the figure increased 42.3% from the year-ago quarter.
GAAP revenues surged 19% from the year-ago quarter to $1.047 billion. Non-GAAP revenues increased 16% year over year to $1.051 billion. Non-GAAP core revenues (excluding the impact of currency and revenues from acquisitions completed within the last 12 months) increased 17% year over year. The Zacks Consensus Estimate is pegged at $1.017 billion
Orders grew 9% year over year to $1.1 billion during the quarter. Notably, core orders grew 10%. Management was positive about tapping key growth segments of a number of end markets. The company’s focus on launching new solutions for growth markets like 5G, Internet of Things (IoT), next-generation wireless, high-speed datacenters and automotive & energy are key catalysts.
Notably, robust demand along with higher investments in emerging technologies drove order growth during the quarter in markets such as solutions and commercial communications, aerospace, defense and semiconductor and services.
Notably, shares of the company went up more than 5% in after-hours trading. Shares of the Keysight have gained 30.7% on a year-to-date basis, against the industry’s decline of 10.8%.
Quarter Details
Communications Solutions Group (“CSG”) includes commercial communications (“CC”) and aerospace, defense & government (“ADG”) end markets. Revenues climbed 23% to $566 million.
CC revenues increased year over year driven by research and development (R&D) solutions related to technologies like 5G, 400G LTE-Advanced and Wi-Fi testing. ADG revenues grew 15% for the fourth consecutive quarter.
Keysight stated that orders for 5G solutions recorded tripple-digit growth year over year for the quarter. Keysight boasts of a robust 5G portfolio comprising comprehensive set of test and design solutions enabling telecom companies in accelerating 5G deployment.
The company recently inked Memorandum of Understanding (MoU) with Korea-based SK Telecom. The collaboration is primarily aimed at design development of 5G devices including performance validation and verification of technologies The company’s acquisitions of Anite and AT4 Wireless have further enriched the company’s 5G solutions portfolio.
Additionally, Keysight also announced extended collaboration with China Telecom in a bid to facilitate deployment of 5G on a commercial scale. Keysight’s robust 5G new radio (“NR”) network emulation offerings will enable trials for China Telecom’s 5G NR devices.
We believe adoption of company’s 5G testing and design solutions are anticipated to bolster top-line growth. The new collaborations are likely to enable the company in expanding presence in Asia Pacific.
Electronic Industrial Solutions Group (“EISG”) revenues increased 21% to $249 million. Automotive and Energy was the key catalyst for this segment.
Ixia Solutions Group (“ISG”) reported revenues of $115 million, down 7.3% year over year on the back of adverse impact by the contract manufacturing transition.
However, strong demand for the company’s high-speed Ethernet based testing solutions as well as its security and application solutions were key positives.
Services Solutions Group (“SSG”) revenues were $121 million, up 10%. Calibration services and increased sales of remarketed solutions drove year-over-year growth.
Gross margin during the reported quarter came in at 61%, on the back of favorable product mix and addition of Ixia. Operating margin expanded 90 bps quarter over quarter to 22.3%.
Balance Sheet & Cash Flow
Keysight ended the quarter with cash & cash equivalents of $913 million, down from the previous quarter of $1.34 billion. Long-term debt came in at $1.29 billion compared with $1.79 billion reported in the previous quarter. Cash flow from operations during the quarter came in at $235 million, while free cash flow was $201 million.
During the quarter, the company repurchased approximately 634,000 shares for a total of $40 million.
Guidance
For the first-quarter of fiscal 2019, the company expects non-GAAP revenues to be in the range of $965-$985 million. The Zacks Consensus Estimate for revenues is pegged at $947.5 million.
Non-GAAP earnings per share for first-quarter fiscal 2019 are projected in the range of 76-82 cents per share. The Zacks Consensus Estimate for revenues is pegged at 72 cents per share.
Zacks Rank and Stock to Consider
Keysight carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include Infineon Technologies AG (IFNNY - Free Report) , QUALCOMM Incorporated (QCOM - Free Report) and Castlight Health, inc. (CSLT - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Infineon Technologies, QUALCOMM and Castlight Health have a long-term expected EPS growth rate of 8.6%, 11.5% and 22.5%, respectively.
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.
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