So, you know that feeling when you beat expectations and then tell everyone you're going to beat them even more next time? That's basically what Keysight Technologies (KEYS) did on Monday. The electronic measurement equipment company reported first-quarter earnings that sailed past what Wall Street was looking for, and then issued guidance for the current quarter that left analysts' estimates looking a bit... modest.
Let's start with the numbers that got the party started. Keysight posted earnings of $2.17 per share for its fiscal first quarter. The consensus estimate was for $2.00, so that's a clean beat. Revenue came in at $1.6 billion, which also handily topped the analyst consensus of $1.54 billion, according to market data.
The strength wasn't concentrated in one area, either. The company breaks its business into two main groups, and both were firing. The Communications Solutions Group (CSG), which is the larger segment, reported revenue of $1.12 billion. That's a hefty 27% jump compared to the same quarter last year. The Electronic Industrial Solutions Group (EISG) brought in $476 million, which is still a solid 15% increase year-over-year.
"Keysight had a strong start to the fiscal year with outstanding results that exceeded our expectations," said Satish Dhanasekaran, the company's CEO. He credited the performance to "investments we have made over the last three years" that are now paying off as the company capitalizes on market momentum.
But the real kicker, and the thing that really got investors excited, was the look ahead. For the second quarter, Keysight isn't just guiding above estimates—it's guiding way above them. The company expects adjusted earnings per share between $2.27 and $2.33. The analyst consensus? A mere $1.91. On the revenue front, Keysight sees it coming in between $1.69 billion and $1.71 billion. The Street was expecting about $1.51 billion.
When a company beats and then raises its outlook that significantly, the market tends to notice. And notice it did. In after-hours trading following the report, Keysight stock climbed 15.10% to $282. That's a pretty clear signal that investors liked what they heard: not just a good quarter in the books, but the promise of more good quarters to come.
