Keysight Technologies Reports First Quarter 2017 Results

SANTA ROSA, Calif. — (BUSINESS WIRE) — February 16, 2017 — Keysight Technologies, Inc. (NYSE: KEYS) today reported financial results for the first fiscal quarter of 2017 ended Jan. 31, 2017.

“The first quarter was another strong quarter with earnings above the mid-point of our guidance. We continued to see strong demand for our leading-edge technology solutions and believe we are well positioned within our markets,” said Ron Nersesian, Keysight president and CEO.

“We continue to make progress on our strategy and are accelerating our transformation for growth with the proposed acquisition of Ixia. We are confident this strategic move will expand our growth opportunities in the communications lifecycle from development through operations,” Nersesian added.

First Quarter Financial Summary

  • Revenue was $726 million, compared with $721 million on a GAAP basis and $726 million on a non-GAAP basis in the first quarter of 2016.
  • GAAP operating margin was 22 percent, compared with 14 percent in the first quarter of 2016. Non-GAAP operating margin was 18 percent, compared with 18 percent in the first quarter of 2016.
  • GAAP net income was $109 million, or $0.63 per share, compared with $64 million, or $0.37 per share in the first quarter of 2016. Non-GAAP net income was $98 million, or $0.57 per share, compared with $95 million, or $0.55 per share in the first quarter of 2016.
  • As of Jan. 31, 2017, cash and cash equivalents totaled $896 million.

Reporting Segments

  • Communications Solutions Group (CSG)
    CSG revenue was $434 million in the first quarter, compared to $440 million in the prior year first quarter. Growth in commercial communications was offset by decline in aerospace, defense and government.
  • Electronic Industrial Solutions Group (EISG)
    EISG revenue was $192 million in the first quarter, compared to $191 million in the first quarter of 2016. Growth in semiconductor measurement was offset by decline in general electronics measurement solutions.
  • Services Solutions Group (SSG)
    SSG revenue in the first quarter grew 5 percent year-over-year to $100 million when compared with $95 million in the first quarter of 2016. SSG revenue growth was driven by an increase in calibration services and remarketed solution sales.

Second Fiscal Quarter Outlook

Keysight provides guidance based on current market conditions and expectations.

Keysight’s second quarter 2017 revenue is expected to be in the range of $720 million to $760 million. Second quarter non-GAAP earnings per share are expected to be in the range of $0.54 to $0.68. Non-GAAP earnings per share as projected for the second quarter of fiscal year 2017 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.

Webcast

Keysight’s management will present more details about its first quarter FY2017 financial results and its second quarter FY2017 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 www.investor.keysight.com under the “ Upcoming Events” section and select “ Q1 2017 Keysight Technologies Inc. Earnings Conference Call” to participate. The webcast will remain on the company site for 90 days.

A telephone replay of the conference call will be available at approximately 4:30 p.m. PT, Feb. 16 through Feb. 23 by dialing +1 855-859-2056 (or +1 404-537-3406 from outside the U.S.) and entering pass code 38573935.

Forward-Looking Statements

This news release contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The forward-looking statements contained herein include, but are not limited to, information regarding Keysight’s future revenues, earnings and profitability; the future demand for the company’s products and services; and customer expectations. These forward-looking statements involve risks and uncertainties that could cause Keysight’s results to differ materially from management’s current expectations. Such risks and uncertainties include, but are not limited to, unforeseen changes in the strength of our customers’ businesses; unforeseen changes in the demand for current and new products, technologies, and services; customer purchasing decisions and timing; timing and ability to close the Ixia acquisition, and the risk that we are not able to realize the savings or benefits expected from integration and restructuring activities.

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