Keysight Technologies, Inc. KEYS is set to disclose its first-quarter fiscal 2024 results on Feb 20 after market close, following an impressive trailing four-quarter earnings surprise of 8%, on average.
Headquartered in Santa Rosa, CA, this electronic design company is expected to announce a revenue contraction due to tepid demand trends in consumer electronics and inventory adjustments. Despite wielding a robust 5G portfolio and engaging in strategic collaborations, it grapples with macroeconomic uncertainty and volatile forex.
Factors at Play
In the preceding quarter, in partnership with Metanoia Communications, Keysight successfully validated the 5G Low Physical Layer Open Radio Unit using the Keysight Open RAN Studio. Furthermore, the company introduced the Keysight Elastic Network Generator software, designed to expedite and streamline network validation procedures.
These innovations, built on a vendor-neutral API, offer adaptability and seamless operation in a variety of testing environments, likely contributing positively to the quarterly earnings.
During the review period, Keysight unveiled an extensive suite of solutions aimed at expediting autonomous and electric vehicle development and bolstering automotive engineers. Among these is the advanced Charging Discovery System, an all-in-one solution assessing all AC and DC charging interfaces of electric vehicles and electric vehicle supply equipment in real time. The company also launched the Keysight EP1150A PathWave Lab operations, an integrated web-based platform optimizing the efficiency of battery testing labs.
However, the company is hindered by unpredictable movements in foreign exchange rates, sluggish demand in smartphone and PC computing markets, and revenue decline across its business verticals. The sluggish demand trend in China and the impact of tariffs due to the U.S.-China trade war are expected to have adversely affected the company’s performance.
For the January quarter, the Zacks Consensus Estimate for total revenues is pegged at $1,246 million, indicating a 9.7% decline from the year-ago reported figure. The consensus estimate for adjusted earnings per share stands at $1.58, reflecting a decrease from the prior year’s figure of $2.02.
Earnings Whispers
With our proven model failing to predict an earnings beat for Keysight in the first quarter, the absence of a positive Earnings ESP plus a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the likelihood of an earnings beat. Unfortunately, this is not the case here.
Earnings ESP: The Earnings ESP, representing the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, stands at 0.00%, with both projected at $1.58.
Stocks to Consider
CommScope (COMM) and NVIDIA Corporation (NVDA) are both slated to report quarterly numbers soon, presenting growth opportunities for investors. Similarly, Cogent (CCOI) has an engaging profile, supported by an Earnings ESP of +10.00% and a Zacks Rank of 3. Be sure to keep an eye on the Zacks Earnings Calendar for upcoming announcements.
