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Will Top-Line Contraction Dent Keysight's (KEYS) Q3 Earnings?
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Keysight Technologies, Inc. (KEYS - Free Report) is scheduled to report third-quarter fiscal 2024 results on Aug 20 after the closing bell. It pulled off a trailing four-quarter earnings surprise of 4.43%, on average.
Based in Santa Rosa, CA, the electronic design company is expected to have recorded a revenue contraction year over year owing to soft demand in Electronic Industrial Solutions Group. Weakness in some end markets of the Commercial Communication Group is likely to have affected the top line.
Factors at Play
In the quarter, Samsung Semiconductor India Research opted to deploy KEYS’ Signaling Field-To-Lab test automation solution in its Bengaluru lab in India. Keysight’s comprehensive, end-to-end 5G wireless protocol signaling solution automates the analysis of 5G, 4G, and IMS field logs and provides precise emulation of field scenarios in the lab.
Vodafone Group also implemented Keysight’s 5G Network Visibility Solutions across its extensive network infrastructure. The solution offers comprehensive insights into network traffic, applications and user behavior across diverse networking environments. Leveraging these features Vodafone aims to enhance user experience. These developments are likely to have supported the top line in the quarter to be reported.
In the quarter under review, Keysight introduced two advanced higher-power modules, the MP4351A and the MP4352A, to expand the capabilities of its MP4300A Series Modular Solar Array Simulator (SAS). Boasting a wide range of realistic simulation features, the products efficiently mimic the rapid changes of conditions in space and offer precise validation of power management systems. Extremely high expenses and limited maintenance opportunities are major challenges for solar power spacecraft and satellites. Keysight solutions effectively address these issues.
The company also collaborated with the AI-RAN Alliance to advance artificial intelligence technology and innovations in radio access networks. Such initiatives are likely to have had a positive impact on the quarterly earnings.
However, the company is experiencing soft demand in the Asia Pacific region. Cautious consumer spending and market uncertainty continue to affect sales in Electronic Industrial Solutions Group. Inventory adjustments and project delays in the semiconductor sector remain a concern.
Our estimate for the EISG segment is pegged at $394.2 million, indicating a 15% year-over-year decline. Our estimate for the Communications Solutions Group segment is pegged at $797.2 million, suggesting a decline from $918 million reported in the year-ago quarter.
For the July quarter, the Zacks Consensus Estimate for total revenues is pegged at $1.19 billion, calling for a decline of 13.66% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share stands at $1.35, suggesting a decline from the prior year’s figure of $2.19.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Keysight in the fiscal third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.35. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are a few companies you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat this season:
Walmart Inc. (WMT - Free Report) is scheduled to report quarterly numbers on Aug 15. It has an Earnings ESP of +1.06% and carries a Zacks Rank of 3.
The Earnings ESP for Dycom Industries (DY - Free Report) is +4.43%, and it has a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Aug 21.
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Will Top-Line Contraction Dent Keysight's (KEYS) Q3 Earnings?
Keysight Technologies, Inc. (KEYS - Free Report) is scheduled to report third-quarter fiscal 2024 results on Aug 20 after the closing bell. It pulled off a trailing four-quarter earnings surprise of 4.43%, on average.
Based in Santa Rosa, CA, the electronic design company is expected to have recorded a revenue contraction year over year owing to soft demand in Electronic Industrial Solutions Group. Weakness in some end markets of the Commercial Communication Group is likely to have affected the top line.
Factors at Play
In the quarter, Samsung Semiconductor India Research opted to deploy KEYS’ Signaling Field-To-Lab test automation solution in its Bengaluru lab in India. Keysight’s comprehensive, end-to-end 5G wireless protocol signaling solution automates the analysis of 5G, 4G, and IMS field logs and provides precise emulation of field scenarios in the lab.
Vodafone Group also implemented Keysight’s 5G Network Visibility Solutions across its extensive network infrastructure. The solution offers comprehensive insights into network traffic, applications and user behavior across diverse networking environments. Leveraging these features Vodafone aims to enhance user experience. These developments are likely to have supported the top line in the quarter to be reported.
In the quarter under review, Keysight introduced two advanced higher-power modules, the MP4351A and the MP4352A, to expand the capabilities of its MP4300A Series Modular Solar Array Simulator (SAS). Boasting a wide range of realistic simulation features, the products efficiently mimic the rapid changes of conditions in space and offer precise validation of power management systems. Extremely high expenses and limited maintenance opportunities are major challenges for solar power spacecraft and satellites. Keysight solutions effectively address these issues.
The company also collaborated with the AI-RAN Alliance to advance artificial intelligence technology and innovations in radio access networks. Such initiatives are likely to have had a positive impact on the quarterly earnings.
However, the company is experiencing soft demand in the Asia Pacific region. Cautious consumer spending and market uncertainty continue to affect sales in Electronic Industrial Solutions Group. Inventory adjustments and project delays in the semiconductor sector remain a concern.
Our estimate for the EISG segment is pegged at $394.2 million, indicating a 15% year-over-year decline. Our estimate for the Communications Solutions Group segment is pegged at $797.2 million, suggesting a decline from $918 million reported in the year-ago quarter.
For the July quarter, the Zacks Consensus Estimate for total revenues is pegged at $1.19 billion, calling for a decline of 13.66% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share stands at $1.35, suggesting a decline from the prior year’s figure of $2.19.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Keysight in the fiscal third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.35. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Keysight Technologies Inc. Price and EPS Surprise
Keysight Technologies Inc. price-eps-surprise | Keysight Technologies Inc. Quote
Zacks Rank: Keysight has a Zacks Rank #3.
Stocks to Consider
Here are a few companies you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat this season:
Target Corporation (TGT - Free Report) is set to release quarterly numbers on Aug 21. It has an Earnings ESP of +0.29% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Walmart Inc. (WMT - Free Report) is scheduled to report quarterly numbers on Aug 15. It has an Earnings ESP of +1.06% and carries a Zacks Rank of 3.
The Earnings ESP for Dycom Industries (DY - Free Report) is +4.43%, and it has a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Aug 21.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.