Keysight Reports Financial Results for Fourth Quarter 2019

Keysight Technologies has reported financial results for the fourth fiscal quarter of 2019 ended October 31, 2019. They delivered a very strong finish to the year with both revenue and earnings. Record-setting quarterly and annual revenue were driven by growth across their portfolio of differentiated solutions and broad-based momentum across multiple end markets. The company continued to execute their strategy and growth initiatives while exceeding its commitments to customers and shareholders. Revenue for the quarter grew 7 percent to reach $1.120 billion when compared with $1.047 billion last year. Revenue for the year grew 11 percent and totaled $4.303 billion.

Reporting Segments

Communications Solutions Group (CSG):

CSG reported record revenue of $706 million in the fourth quarter, up 7 percent, driven by continued strength across the 5G wireless ecosystem and strength in US aerospace, defense, and government investment.

Electronic Industrial Solutions Group (EISG):

EISG reported revenue of $284 million in the fourth quarter, up 3 percent, driven by strength in the broad portfolio of products that serve our general electronics market and on-going investments in next-generation automotive and energy technologies, partially offset by semiconductor measurement solutions.

Ixia Solutions Group (ISG):

ISG revenue grew 15 percent in the fourth quarter to $132 million. Double-digit revenue growth in both network test and network visibility solutions was driven by investments in 400GE and enterprise networks.

Fourth Quarter Financial Result Summary
  • GAAP revenue grew 7 percent to reach $1.120 billion when compared with $1.047 billion last year.
  • Non-GAAP revenue grew 7 percent to reach $1.122 billion. Non-GAAP core revenue, which also excludes the impact of foreign currency changes and revenue associated with businesses acquired or divested within the last twelve months, increased 7 percent.
  • GAAP net income was $195 million, or $1.02 per share, compared with GAAP net loss of $114 million, or $(0.61) per share, in the fourth quarter of 2018.
  • Non-GAAP net income was $254 million, or $1.33 per share, compared with $193 million, or $1.01 per share in the fourth quarter of 2018.
  • As of October 31, 2019, cash and cash equivalents totaled $1.598 billion.
The fiscal year 2019 Financial Summary
  • GAAP revenue grew 11 percent over last year and totaled $4.303 billion. Non-GAAP revenue grew 10 percent to reach $4.312 billion. Non-GAAP core revenue grew 11 percent year-over-year.
  • GAAP net income was $621 million, or $3.25 per share, compared with $165 million, or $0.86 per share in fiscal 2018. Non-GAAP net income was $902 million, or $4.72 per share, compared with $618 million, or $3.24 per share in fiscal 2018.
  • Keysight acquired approximately 2.1 million shares in the open market at an average share price of $76.32, for a total consideration of $160 million during the fiscal year 2019. Keysight has $410 million remaining under the current $500 million share repurchase authorization implemented in May 2019.

Outlook: Keysight’s first fiscal quarter of 2020 revenue is expected to be in the range of $1.045 billion to $1.065 billion. Non-GAAP earnings per share for the first fiscal quarter of 2020 are expected to be in the range of $1.04 to $1.10, which 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.

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