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Keysight Technologies Inc. KEYS 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 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.