SANTA ROSA, Calif. — (BUSINESS WIRE) — March 1, 2018 — Keysight Technologies, Inc. (NYSE: KEYS) today reported financial results for the first fiscal quarter of 2018 ended Jan. 31, 2018.
“We delivered another outstanding quarter with both revenue and earnings exceeding our guidance. Our better than expected results were driven by continued strong order growth across our markets and our ability to recover from the Northern California wildfires faster than we had planned," said Ron Nersesian, Keysight president and CEO.
"Order growth accelerated to 39 percent overall and 16 percent on a core basis driven by strength in our key focus areas including 5G, automotive & energy and aerospace and defense. Our transformation strategy is delivering results, and we are pleased with our performance and growing leadership position in the market.” Nersesian added.
First Quarter Financial Summary
- GAAP revenue grew 15 percent to reach $837 million, when compared with $726 million last year. Non-GAAP revenue, which excludes the impact of fair value adjustment to acquisition-related deferred revenue balances, grew 18 percent to reach $856 million. Non-GAAP core revenue decreased 2 percent, reflecting the disruption in production from the Northern California wildfires.
- GAAP net income was $94 million, or $0.50 per share, compared with $109 million, or $0.63 per share in the first quarter of 2017. Non-GAAP net income was $97 million, or $0.51 per share using 189 million weighted average shares, compared with $98 million, or $0.57 per share using 173 million weighted average shares in the first quarter of 2017.
- As of Jan. 31, 2018, cash and cash equivalents totaled $980 million.
- Communications Solutions Group (CSG)
CSG revenue was $420 million in the first quarter, compared to $434 million in the prior year first quarter. CSG revenue was most impacted by the disruption in production due to the Northern California wildfires; however, order growth for this segment was strong across both of its end-markets, resulting in growing backlog.
- Electronic Industrial Solutions Group (EISG)
EISG revenue grew 6 percent to $203 million in the first quarter, compared to $192 million in the first quarter of 2017. Growth was led by automotive & energy and semiconductor measurement solutions, offset by a slight decline in general electronics measurement.
- Ixia Solutions Group (ISG)
ISG revenue was $127 million in the first quarter. ISG saw increased shipments for its high-speed Ethernet 400G test solutions and overall, support renewals reached a new record.
- Services Solutions Group (SSG)
SSG revenue grew 6 percent to $106 million in the first quarter, compared to $100 million in the first quarter of 2017. Revenue growth for SSG was driven by an increase in sales for remarketed solutions and calibration and overall regional strength in the Americas and Asia Pacific.
Keysight provides guidance based on current market conditions and expectations and is raising its guidance for the first half of 2018.
Keysight’s first half of 2018 GAAP revenue is expected to be in the range of $1,777 million to $1,807 million and non-GAAP revenue for the first half of 2018 is expected to be in the range of $1,805 million to $1,835 million. The midpoint of this first half 2018 guidance implies second quarter 2018 GAAP revenue of $955 million and non-GAAP revenue of $964 million.
Non-GAAP earnings per share for the first half of 2018 are expected to be in the range of $1.27 to $1.37 and, at the midpoint, imply second-quarter non-GAAP earnings per share of approximately $0.81. Given the new U.S. tax law under the Tax Cuts and Jobs Act, Keysight estimates that its annual non-GAAP tax rate will decrease by 200 basis points to 15 percent. Non-GAAP earnings per share as projected for the first half and second quarter of fiscal year 2018 and the estimated annual non-GAAP tax rate exclude items that pertain to future events and are not currently estimable with a reasonable degree of accuracy. Therefore, no reconciliation to GAAP amounts has been provided. Further information is discussed in the section titled “Non-GAAP Measures” below.
Keysight’s management will present more details about its first quarter
FY2018 financial results and its second quarter FY2018 outlook on a
conference call with investors today at 1:30 p.m. PT. This event will be
webcast in listen-only mode. Listeners may log on to the call at
under the “
Events ” section and select “
2018 Keysight Technologies Inc. Earnings Conference Call ”
to participate or dial +1 866-393-4306 (U.S. only) or +1 734-385-2616
(International). The webcast will remain on the company site for 90 days.