Keysight Technologies Beats Analyst Expectations in Q2

Keysight Technologies (KEYS) beat earnings and revenue estimates in the fiscal second quarter. Keysight manufactures electronics test and measurement equipment and software. KEYS shares declined 1.6% in Wednesday’s extended trading session.

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The company’s reported net sales of $1.22 billion in fiscal Q2 which surpassed the Street’s estimates of $1.21 billion and jumped 36% from the year-ago period.

Revenues in the Communications Solutions Group (CSG) were $877 million, up 34% year-over-year, while Electronic Industrial Solutions Group (EISG) segment revenues increased 42% from the year-ago quarter to $344 million.

Earnings soared 84.6% to $1.44 per share, beating the consensus estimates of $1.34 per share.

Orders in the quarter climbed 22% year-over-year to $1.33 billion.

Keysight Technologies CEO Ron Nersesian said, “As an enabler of leading-edge disruptive innovation, Keysight is well-positioned to capitalize on multiple waves of technology that are fueling our growth for the long term.” (See Keysight Technologies stock analysis on TipRanks)

For fiscal Q3, the company expects revenue to be in the range of $1.205 – 1.225 billion, versus the consensus estimate of $1.2 billion.

Non-GAAP earnings are projected to be in the range of $1.39 – $1.45. The consensus estimate for the same is pegged at $1.38.

The stock has picked up a rating from one analyst in the past three months. Susquehanna analyst Mehdi Hosseini maintained a Buy rating and a price target of $178 (28.9% upside potential). Shares have increased 34.2% over the past year.

Hosseini said, “KEYS’ report and guide was better than feared. We were concerned that weak 5G BTS demand would adversely weigh on KEYS’ orders/guide. However, the company’s diverse product portfolio and customer mix once again proved that KEYS can ride out the volatility in one particular end-market segment. The fact that Aerospace/Defense and EISG exceeded expectation and actually made up for more than the weaker than expected Commercial Communication is, in our view, a reflection of such diversification.”

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Keysight Technologies is currently Neutral, as 6 hedge funds decreased their cumulative holdings of the stock by 861,800 shares in the last quarter.