Please ensure Javascript is enabled for purposes of website accessibility

Why Keysight Technology Stock Popped Today

By Evan Niu, CFA – Aug 22, 2019 at 3:31PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Keysight delivered a beat-and-raise quarter after Huawei headwinds weren't as bad as expected.

What happened

Shares of Keysight Technology (KEYS -0.52%) have popped today, up by 13% as of 2:45 p.m. EDT, after the company reported fiscal third-quarter earnings. Both top- and bottom-line results came in ahead of consensus estimates.

So what

Revenue in the fiscal third quarter jumped 8% to $1.09 billion, compared to the $1.05 billion in sales that analysts were expecting. That translated into adjusted net income of $239 million, or $1.25 per share. The market was expecting just $1.02 per share in adjusted profits. The industrial services company finished the quarter with $1.4 billion in cash on the balance sheet.

Green stock chart going up

Image source: Getty Images.

"Keysight delivered another excellent quarter with both revenue and earnings exceeding the high-end of our guidance," CEO Ron Nersesian said in a statement. "Record third quarter revenue was driven by growth across the majority of our end markets as we continued to capture a significant portion of the demand we see in the marketplace."

Now what

Nersesian added that Keysight was boosting its full-year outlook thanks to the strong momentum. The company expects fiscal fourth-quarter revenue to be in the range of $1.08 billion to $1.1 billion, which should result in adjusted earnings per share of $1.14 to $1.20. That would represent full-year revenue growth of 9% to 10%, up from Keysight's prior forecast of 7% to 8% growth, CFO Neil Dougherty noted on the conference call.

Keysight has been hit by the Trump administration's Huawei ban, but the challenges haven't been as bad as expected. "To date, we have been able to ship some products to [Huawei] within the current legal regulations," Dougherty said. "As a result, we expect to see a slightly smaller headwind in Q4 than previously anticipated."

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Keysight Technologies Stock Quote
Keysight Technologies
KEYS
$180.53 (-0.52%) $0.95

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.