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Keysight Technologies Issues Strong Outlook Following Fiscal Second-Quarter Beat

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Keysight Technologies Issues Strong Outlook Following Fiscal Second-Quarter Beat

Keysight Technologies (KEYS) shares rose early Wednesday after the electronics test and measurement equipment manufacturer issued an upbeat fiscal third-quarter outlook, while its results for the previous three-month period topped market expectations.

The company anticipates adjusted earnings to be in a range of $2.43 to $2.49 per share for the ongoing quarter, it said late Tuesday. Revenue is pegged at $1.73 billion to $1.75 billion, representing annual growth of about 29% at the midpoint. The current consensus on FactSet is for non-GAAP EPS of $2.23 and sales of $1.67 billion.

"Given the strong results we have delivered in the first half of the fiscal year, combined with our guidance for fiscal (third quarter), we are on track for revenue growth in the high-20% range for fiscal 2026," Chief Financial Officer Neil Dougherty said during an earnings call, according to a FactSet transcript. "With the visibility we currently have, we would expect to see a historically typical sequential revenue increase into (the fiscal fourth quarter)."

Shares of the company were up 2.4% in the most recent premarket activity.

Keysight posted adjusted EPS of $2.87 for the first quarter ended April, up from $1.70 the year before, topping the Street's view for $2.32. Revenue climbed to $1.72 billion from $1.31 billion, just ahead of the average analyst estimate for $1.71 billion.

"We delivered outstanding results in fiscal (second quarter), setting new company records for orders, revenue and earnings per share," Dougherty said on the call. "Our teams capitalized on the robust and dynamic demand environment, resulting in strong double-digit growth across all our business groups."

Revenue in the communications solutions group segment advanced 35% to $1.23 billion, driven by gains of 40% in commercial communications and 24% in aerospace, defense and government. Electronic industrial solutions sales rose to $486 million from $393 million, buoyed by double-digit gains across all semiconductor, general electronics and automotive and energy end markets, according to the company.

Orders surged 56% on a reported basis, with acquisitions and currency adding 700 and 100 basis points, respectively, according to Dougherty. Core orders rose 48%, the CFO added.

Keysight said it recorded a $100 million receivable in the second quarter related to court rulings on President Donald Trump's tariffs this year, resulting in a $97 million reduction in costs and expenses and a $40 million decrease in revenue amid customer refunds.

In February, the US Supreme Court invalidated Trump's reciprocal tariffs imposed in 2025 under the International Emergency Economic Powers Act. Subsequently, the US Court of International Trade directed US Customs and Border Protection to set up a process to refund certain tariffs that were previously collected, according to Keysight.

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