KEYS Q4 Earnings Top Estimate, Top Line Down on Weakness in Automotive

Keysight, Inc. KEYS reported relatively strong fourth-quarter fiscal 2024 results, with the bottom and the top lines surpassing the respective Zacks Consensus Estimate. However, the company reported a top-line decline year over year. Weakness in multiple end markets impeded the net sales growth.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Strength in AI data center market, aerospace, defense and government end markets and healthy momentum in software and services partially cushioned the top line.Net IncomeOn a GAAP basis the company reported a net loss of $73 million or a loss of 42 cents per share, against a net income of $226 million or $1.28 per share in the year-ago quarter. Higher income tax expenses led to a net loss during the quarter.Non-GAAP net income in the reported quarter was $288 million or $1.65 per share compared with $352 million or $1.99 per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate by 8 cents.In fiscal 2024, the company reported a GAAP net income of $0.61 billion or $3.51 per share compared with $1.06 billion or $5.91 per share in fiscal 2023. Non-GAAP net income stood at $1.10 billion or $6.27 per share compared with $1.49 billion or $8.33 per share last year.Keysight Technologies Inc. Price, Consensus and EPS Surprise Keysight Technologies Inc. price-consensus-eps-surprise-chart | Keysight Technologies Inc. QuoteRevenuesQuarterly net sales were $1.29 billion compared with $1.31 billion recorded in the year-ago quarter. Weak demand in multiple end markets hindered revenue growth. However, Total orders increased 1% year over year to $1.34 billion. The top line beat the Zacks Consensus Estimate by $34 million.In fiscal 2024, KEYS generated $4.98 billion in revenues compared with $5.46 billion in fiscal 2023.Communication Solutions Group (CSG) generated $894 million in revenues, down 2% year over year. Timing of new projects and funding led to revenue decline year over year from the Aerospace, Defense & Government end markets. Steady investment in electromagnetic spectrum operations, radar and advanced communication systems partially reversed this trend. Ongoing expansion of AI native data center infrastructure is driving growth in the wireline business. Despite inventory correction, the wireless business benefitted from Open RAN expansion. Net sales beat our revenue estimate of $849.8 million.The Electronic Industrial Solutions Group (EISG) segment’s revenues dropped to $393 million from $420 million in the prior-year quarter. Soft demand in the electric vehicle market and battery oversupply affected net sales. In the semiconductor vertical, demand for parametric wafer test solutions remains strong. Strong demand for digital health applications and improvement in consumer and industrial applications related to high-speed connectivity supported net sales in the general electronics vertical. The top line fell short of our revenue estimate of $396.3 million.Region-wise, Asia-Pacific revenues aggregated $508 million compared with $513 million in the prior-year quarter. The company reported a 4% year-over-year decline in the Americas to $549 million. Revenues from Europe were $230 million, up 1% from the year-ago quarter's levels.Other DetailsDuring the quarter, the company’s non-GAAP gross profit totaled $829 million compared with $858 million in the year-ago quarter, with gross margins of 64.5% and 65.5%, respectively. The non-GAAP operating margin was 25.8%, down from 29.3% in the prior-year quarter.CSG reported a non-GAAP operating margin of 27.9%, down 90 basis points (bps) year over year. EISG reported a non-GAAP operating margin of 21.1%, down 920 bps year over year.Cash Flow & LiquidityIn 2024, Keysight generated $1.05 billion in cash from operating activities compared with $1.41 billion a year ago. As of Oct. 31, 2024, the company had $1.79 billion in cash and cash equivalents, with $1.79 billion of long-term debt.OutlookFor the first quarter of fiscal 2025, Keysight expects revenues in the range of $1.265-$1.285 billion. Non-GAAP earnings are estimated between $1.65 and $1.71 per share.KEYS’ Zacks Rank and Key PicksKeysight currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader industry have been discussed below.Zillow Group, Inc. ZG carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.In the last reported quarter, it delivered an earnings surprise of 9.38%. ZG delivered an earnings surprise of 25.47%, on average, in the trailing four quarters. The company is witnessing solid momentum in rental revenues, driven by growth in both multi and single-family listings, which is a positive factor. InterDigital IDCC sports a Zacks Rank #1 at present. In the last reported quarter, it delivered an earnings surprise of 114.47%.It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions, which are used in digital cellular, as well as wireless 3G, 4G and IEEE 802-related products and networks.Workday Inc. WDAY carries a Zacks Rank of 2 at present. In the last reported quarter, it delivered an earnings surprise of 7.36%.WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system that makes the process easier for organizations to provide analytical insights and decision support.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report InterDigital, Inc. (IDCC): Free Stock Analysis Report Workday, Inc. (WDAY): Free Stock Analysis Report Keysight Technologies Inc. (KEYS): Free Stock Analysis Report Zillow Group, Inc. (ZG): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks