Keysight Technologies, an industry leader in electronics test and measurement equipment, experienced a significant surge in its stock price following the announcement of its impressive fiscal third-quarter financial results. The company's Chief Executive Officer, Satish Dhanasekaran, provided a promising outlook, stating that orders for the second half of the fiscal year are expected to exceed those seen in the previous six-month period. The company anticipates adjusted earnings per share (EPS) for the ongoing quarter to be in the range of $1.53 to $1.59, alongside projected revenue between $1.25 billion and $1.27 billion.
According to the latest consensus data from Capital IQ, analysts are predicting a normalized EPS of $1.56 and a revenue figure of $1.26 billion for this period. During an earnings call, Dhanasekaran highlighted the mixed demand environment the company is navigating, noting, "We continue to see stability and pockets of growth, particularly in commercial communications." He elaborated on the encouraging demand signals, expressing optimism that the inflow of opportunities supports an expectation for second-half orders to surpass those of the first half.
Dhanasekaran also mentioned a projected gradual recovery in 2025, contingent upon no further deterioration of the macroeconomic landscape. In the fiscal third quarter ending in July, adjusted EPS was reported at $1.57, a decline from $2.19 year-over-year, yet still exceeding Wall Street's expectations of $1.35.
Revenue for this period decreased to $1.22 billion from $1.38 billion in the previous year, but once again, it surpassed analysts’ expectations, which had set the estimate at $1.19 billion. Following the announcement of these results, Keysight's stock rallied by an impressive 11% in premarket trading. The company reported a slight increase in orders, rising to $1.25 billion from $1.24 billion in the previous year's quarter, marking a performance that was "slightly above" expectations and showcasing growth in the low single digits on a sequential basis.
Dhanasekaran remarked, "For the second consecutive quarter, we saw relative stability in both orders and revenue," emphasizing the positive trajectory. However, the electronic industrial solutions group did face challenges, as revenue plummeted by 20% to $370 million, attributed to muted customer spending and less favorable market conditions.
Despite this decline, Dhanasekaran noted a sense of "relative stability" in the orders received within this segment. Furthermore, revenues from the communications solutions segment experienced an 8% decline, totaling $847 million, which was impacted by a 6% reduction in commercial communications and a 10% dip in the aerospace, defense, and government sectors. In conclusion, Dhanasekaran asserted that the company remains well positioned to take advantage of emerging technology trends and continues to focus on delivering value to both customers and shareholders.
He emphasized, "We're well positioned to capitalize on technology inflections ahead of us and remain laser-focused on value creation for both customers and shareholders." Currently, Keysight Technologies' stock is priced at $154.06, reflecting a change of +15.49, equating to a percentage increase of +11.18..