Keysight Technologies (KEYS) shares were up early Wednesday after the electronics test and measurement equipment manufacturer provided a fiscal fourth-quarter earnings outlook above Wall Street's estimates and reported better-than-expected third-quarter results.
Adjusted earnings are anticipated to be in a range of $3.34 to $3.40 per share for the ongoing quarter, the company said late Tuesday. Revenue is pegged at $1.93 billion to $1.95 billion. The current consensus on FactSet is for non-GAAP EPS of $3.29 and sales of $1.93 billion.
For fiscal 2026, Keysight projects adjusted EPS of $11.48 and revenue of $7.1 billion, representing annual growth of 60% and 32%, respectively, according to an earnings presentation. The Street is looking for non-GAAP EPS of $11.32 and sales of $7.08 billion for the year.
The stock gained 2.6% in the most recent premarket activity.
The firm's adjusted EPS jumped to $3.07 in the quarter ended July from $1.72 in the prior-year period, surpassing the average analyst estimate of $2.48. Revenue advanced to $1.85 billion from $1.35 billion, ahead of the Street's view for $1.75 billion.
"Our momentum continued in (the fiscal third quarter) as we delivered record results that exceeded the high end of our guidance range for both revenue and EPS," Chief Financial Officer Neil Dougherty said during an earnings call, according to a FactSet transcript. "These results were driven by further acceleration in our commercial communications business and ongoing strength in electronic industrial solutions and aerospace, defense, and government."
Revenue in the communications solutions group segment inclined 43% to $1.35 billion, buoyed by a 56% surge in commercial communications and 14% growth in aerospace, defense and government. Electronic industrial solutions sales increased 21% to $501 million, amid gains across the semiconductor, general electronics and automotive and energy end markets, according to the company.
Orders soared 56% on a reported basis to $2.09 billion, with acquisitions contributing five percentage points, Dougherty said on the call.
In a client note last month, Morgan Stanley said it expected Keysight to benefit from rising AI infrastructure investment and the broadening of network architectures due to its architecture-agnostic exposure.
"The breadth of our portfolio and sustained engagements with customers across this ecosystem are enabling Keysight to participate across the AI innovation life cycle," Chief Executive Satish Dhanasekaran told analysts on the Tuesday call. "The industry continues to scale, and we have seen a meaningful increase in the diversity of applications and a greater opportunity to expand with customers globally."
In July, computational software company Cadence Design Systems (CDNS) lifted its full-year outlook and reported better-than-expected fiscal second-quarter earnings.
