Shares of electronics test, measurement equipment and software manufacturer Keysight Technologies, Inc. (KEYS) declined 2.2% in Wednesday’s extended trade to close at $160 despite the company’s stronger-than-expected results for the third quarter ended July 31, 2021. The strong results were primarily driven by growth in revenues.
Quarterly revenues grew 23% year-over-year to $1.25 billion, surpassing the Street’s estimates of $1.22 billion. Revenues from Communications Solutions Group and Electronic Industrial Solutions Group rose 15% and 48% year-over-year, respectively, boosting the overall growth in revenues.
The company reported quarterly earnings per share (EPS) of $1.54, up 29.4% from the previous year’s figure of $1.19 per share. Further, the figure topped analysts estimates of $1.44 per share.
Notably, in other key operating metrics, the company’s orders grew 23% year-over-year to $1.31 billion.
Keysight expects revenues to be between $1.25 billion and 1.27 billion in the fourth quarter against the consensus estimates of $1.26 billion. Similarly, it anticipates its Q4 earnings to be in the range of $1.59 to $1.65 per share against the consensus of $1.59 per share.
The CEO of Keysight, Ron Nersesian, said, “We generated order and revenue growth of 23 percent and delivered 46 percent GAAP and 29 percent non-GAAP earnings per share growth, while effectively navigating supply chain challenges. We have a track record of strong execution and delivering on our commitments, and we are confident in our ability to capitalize on the many growth opportunities ahead of us.” (See Keysight stock chart on TipRanks)
Two months ago, Barclays analyst Tim Long downgraded the stock to a Hold with a price target of $162, which implies 1% downside potential from current levels.
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 3 Buys and 2 Holds. The average Keysight price target of $164.20 implies that the stock has 0.3% upside potential from current levels.
Keysight scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained 57.4% over the past year.
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