Yahoo Finance Keysight (KEYS) Outpaces Q2 Earnings and Revenue Estimates
Keysight Technologies, Inc. KEYS reported impressive second-quarter fiscal 2022 (ended Apr 30, 2022) results beating both the top-line and bottom-line estimates. The strong performance during the quarter was backed by the strong execution and robust end-market demand for Keysight’s high-value, differentiated solutions. Also, the company successfully navigated the supply chain and geopolitical disruptions, which contributed to the strong performance.
Quarter Details
Revenues reported in the quarter were $1,351 million, beating the Zacks Consensus Estimate of $1,302 million and growing 11% year over year. The Communications Solutions Group generated $963 million in revenues, compared with $877 million in the prior-year quarter, reflecting growth of 9.8%. The growth was attributable to the continued strong momentum in 5G R&D, ORAN, optical technologies, cyber, and signal monitoring. The Electronic Industrial Solutions Group generated $388 million in revenues compared with $344 million in the prior-year quarter, up 12.8%. The double-digit growth was primarily driven by automotive and semiconductor solutions.
The net income reported during the quarter was $1.83, beating the Zacks Consensus Estimate by 16 cents, up 27% from the prior-year quarter. The growth is a reflection of the advancement of the software-centric solutions strategy. During the quarter, the orders grew 9% on a year-over-year basis.
Keysight Technologies Inc. Price, Consensus and EPS Surprise
Keysight Technologies Inc. price-consensus-eps-surprise-chart | Keysight Technologies Inc. Quote
Operating Details
During the quarter, Keysight achieved a gross margin of 65% and an operating margin of 29%. CSG reported a gross margin of 66.2%, expanding 150 basis points (bps) from the prior-year quarter while EISG reported a gross margin of 62%, contracting 200 bps. CSG operating margin of 28.2%, jumped 280 bps from the prior-year quarter and EISG’s operating margin of 30.3% expanded 190 bps.
Cash Flow & Liquidity
During the fiscal second quarter, Keysight generated $298 million of cash from operating activities compared with $402 million in the prior-year quarter. As of April 30, 2022, the company had $1,886 million in cash and cash equivalents with $1,792 million of long-term debt.
Guidance
For the third quarter of fiscal 2022, Keysight expects revenues in the range of $1,330-$1,350 million. Non-GAAP earnings are estimated between $1.74 and $1.80 per share.
Zacks Rank & Stocks to Consider
Keysight currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Duck Creek Technologies, Inc. DCT is a better-ranked stock in the broader Zacks Computer and Technology sector, sporting a Zacks Rank #1. Current-year estimates have been revised up by 400% over the past year, while that for the next year is up 40%.
The long-term earnings growth expectation for Duck Creek is 50%.
SAP SE SAP, carrying a Zacks Rank #2 (Buy), is a key pick for stock investors. SAP has a long-term earnings growth expectation of 5.89%.
SAP, with its Rise with SAP solution, was adopted by clients, including Accenture, Canon Production Printing, Exide Industries Limited, NEC Corporation, Qinqin Food, Rising Auto and TELUS.
Silicon Motion Technology SIMO, carrying Zacks Rank #2, is another great pick for investors. It has a long-term earnings growth expectation of 9%, with an earnings surprise of 3.8% on average in the trailing four quarters.
Silicon Motion has established itself as the leading merchant supplier of client SSD controller to module makers, including most leaders in the United States.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
SAP SE (SAP) : Free Stock Analysis Report
Duck Creek Technologies, Inc. (DCT) : Free Stock Analysis Report
Silicon Motion Technology Corporation (SIMO) : Free Stock Analysis Report
Keysight Technologies Inc. (KEYS) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
