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Keysight Technologies Reports Fourth Quarter and Fiscal 2017 Results


 Tags:   Networks                This was published: 6 Dec 2017 - 09:26 pm         Print article: Printer friendly page
          

Keysight Technologies Reports Fourth Quarter and Fiscal 2017 Results - on DefenceBriefing.net

Keysight Technologies, Inc. (NYSE: KEYS) today reported financial results for the fourth fiscal quarter and fiscal year ended Oct. 31, 2017.



“We delivered an outstanding fourth quarter across the board with record orders of over $1 billion. Order growth accelerated to 11 percent on a core basis and 27 percent overall driven by strength in our key focus areas, and earnings exceeded our guidance,” said Ron Nersesian, Keysight president and CEO.

“While our headquarters was closed for over three weeks due to the northern California wildfires, we are very pleased with our fourth quarter performance and execution, resulting in a strong close to a transformative year for Keysight. Our success this year demonstrates the power of our strategic focus and our strong alignment with our customers, while providing a solid foundation to drive growth and earnings in 2018 and beyond,” Nersesian added.

Fourth Quarter Financial Summary

  • GAAP revenue grew 17 percent to reach $878 million, when compared with $751 million last year. Non-GAAP revenue, which excludes the impact of fair value adjustment to acquisition-related deferred revenue balances, grew 20 percent to reach $902 million or 3 percent on a core basis.
  • GAAP operating margin was 4.4 percent, compared with 14 percent in the fourth quarter of 2016. Non-GAAP operating margin was 20 percent, compared with 19 percent in the fourth quarter of 2016.
  • GAAP net loss was $38 million, or $0.20 per share, compared with net income of $92 million, or $0.53 per share in the fourth quarter of 2016. Non-GAAP net income was $135 million, or $0.71 per share, compared with $110 million, or $0.64 per share in the fourth quarter of 2016.
  • As of Oct. 31, 2017, cash and cash equivalents totaled $818 million.

Fiscal Year 2017 Financial Summary

  • GAAP revenue grew 9 percent over last year and totaled $3.2 billion. Non-GAAP revenue grew 11 percent to reach $3.2 billion. Non-GAAP core revenue grew 2 percent year-over-year.
  • GAAP operating margin was 7 percent, compared with 14 percent in fiscal 2016. Non-GAAP operating margin was 19 percent, compared with 19 percent in fiscal 2016.
  • GAAP net income was $102 million, or $0.56 per share, compared with $335 million, or $1.95 per share in fiscal 2016. Non-GAAP net income was $462 million, or $2.53 per share, compared with $419 million, or $2.43 per share in fiscal 2016.

Reporting Segments

  • Communications Solutions Group (CSG)
    • CSG revenue grew 4 percent in the fourth quarter to $462 million when compared with $442 million in the fourth quarter of 2016. CSG revenue growth was driven by R&D solutions for new technologies including 5G, 4.9G and Wi-Fi test that was partially offset by a decline in revenue from aerospace, defense and government, despite strong order growth in this end-market.
    • For fiscal 2017, CSG generated $1.7 billion in revenue, compared with revenue of $1.8 billion in fiscal 2016.
  • Electronic Industrial Solutions Group (EISG)
    • EISG revenue grew 3 percent in the fourth quarter to $206 million when compared with $201 million in the fourth quarter of 2016. Automotive & Energy led the growth for EISG followed closely by General Electronics Measurement.
    • For fiscal 2017, EISG revenue generated $836 million in revenue, compared with revenue of $776 million in fiscal 2016.
  • Ixia Solutions Group (ISG)
    • ISG revenue was $124 million in the fourth quarter. ISG saw solid demand for its high-speed Ethernet test solutions, including 400G, and strong orders for its security and applications solutions. Additionally, visibility sales to its service provider customers were strong, offset by softness in enterprise accounts.
    • For fiscal 2017, ISG revenue totaled $256 million.
  • Services Solutions Group (SSG)
    • SSG revenue in the fourth quarter grew 2 percent year-over-year to reach $110 million when compared to $108 million in the fourth quarter of 2016. Growth in calibration and remarketed solution sales were partially offset by a decline in repair revenue.
    • For fiscal 2017, SSG revenue generated $419 million in revenue, compared with revenue of $402 million in fiscal 2016.

First Half Fiscal 2018 Outlook

Keysight provides guidance based on current market conditions and expectations. Given Keysight’s headquarters was under mandatory evacuation for more than three weeks due to the northern California wildfires, the seasonality of revenue will be impacted in the next few quarters and the company is focusing its guidance on the first half of fiscal year 2018.

Keysight’s first half of 2018 GAAP revenue is expected to be approximately $1,748 million and non-GAAP revenue for the first half of 2018 is expected to be approximately $1,775 million. Keysight’s first quarter 2018 GAAP revenue is expected to be in the range of $762 million to $802 million and non-GAAP revenue is expected to be in the range of $780 million to $820 million, reflecting unusual seasonality due to the impact to operations from the northern California wildfires.

Non-GAAP earnings per share for the first half of 2018 are expected to be approximately $1.29 and first quarter 2018 non-GAAP earnings per share are expected to be in the range of $0.29 to $0.43. Non-GAAP earnings per share as projected for the first quarter and first half of fiscal year 2018 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 fourth quarter FY2017 financial results and its first half FY2018 outlook on a conference call with investors today at 1:30 p.m. PT. Listeners may log on to the call at www.investor.keysight.com under the “Upcoming Events” section and select “Q4 2017 Keysight Technologies Inc. Earnings Conference Call” to participate or dial +1 844-579-6824 (U.S. only) or +1 763-488-9145 (International). 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, Dec. 6 through Dec. 13 by dialing +1 855-859-2056 (or +1 404-537-3406 from outside the U.S.), and entering access code 94173241.

Forward-Looking Statements

This communication contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. These forward-looking statements involve risks and uncertainties that could significantly affect the expected results and are based on certain key assumptions of Keysight’s management and on currently available information. Due to such uncertainties and risks, no assurances can be given that such expectations or assumptions will prove to have been correct, and readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Keysight undertakes no responsibility to publicly update or revise any forward-looking statement. The forward-looking statements contained herein include, but are not limited to, information and future guidance on the company’s goals, priorities, revenues, demand, growth opportunities, customer service and innovation plans, new product introductions, financial condition, earnings, the continued strengths and expected growth of the markets the company sells into, operations, operating earnings, and tax rates that 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, changes in the demand for current and new products, technologies, and services; customer purchasing decisions and timing, and the risk that we are not able to realize the savings or benefits expected from integration or restructuring activities. The words “anticipate,” “plan,” “estimate,” “expect,” “intend,” “will,” “should,” “forecast,” “project,” and similar expressions, as they relate to the company, are intended to identify forward-looking statements.

In addition to the risks above, other risks that Keysight faces include those detailed in Keysight’s filings with the Securities and Exchange Commission, including our Form 10-K for the fiscal year ended Oct. 31, 2016, and Keysight’s quarterly report on Form 10-Q for the period ended July 31, 2017.

Segment Data

Segment data reflects the results of our reportable segments under our management reporting system. Segment revenue and income from operations are consistent with the respective non-GAAP measures as explained below and in the attached supplemental schedules. Segment data are provided on page 8 of the attached tables.

Use of Non-GAAP Financial Measures

In addition to financial information prepared in accordance with U.S. GAAP (“GAAP”), this document also contains certain non-GAAP financial measures based on management’s view of performance, including:

  • Non-GAAP Core Revenue
  • Non-GAAP Revenue
  • Non-GAAP Income from Operations
  • Non-GAAP Net Income
  • Non-GAAP Diluted EPS

See the attached supplemental schedules for reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure for the three months ended Oct. 31, 2017 and FY17 and for projected non-GAAP revenue amounts for the three months ended Jan. 31, 2018 and first half of FY2018. Following the reconciliations is a discussion of the items adjusted from our non-GAAP financial measures and the company’s reasons for including or excluding certain categories of income or expenses from our non-GAAP results.

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Further information:
Organisation name:    Keysight Technologies, Inc."> <Property FormalName="PrimaryTwitterHandle" Value=";@keysight
Organisation stock symbol: NYSE:KEYS


Latest stock price data for NYSE:KEYS

 


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