Keysight Technologies revenue climbs 17% in 4Q, net income falls 70% on year

Ron Nersesian, CEO of Keysight Technologies, Santa Rosa (CHRISTOPHER CHUNG/ PD FILE)

JAMES DUNN,

Despite having its headquarters and campus in Santa Rosa overrun by wildfire on Oct. 9 and closed for more than three weeks, Keysight Technologies landed a solid fourth quarter in its 2017 fiscal year ended October 31, 2017. On Wednesday the company reported revenue of $878 million, up 17 percent from $751 million in the same quarter last year.

For the full fiscal year, Keysight revenue was $3.2 billion, up 9 percent.

Net income was $102 million or 56 cents a share, down nearly 70 percent from net income of $335 million or $1.95 per share in fiscal 2016.

In 2017, Keysight acquired Ixia, a California technology company, in a deal valued at $1.6 billion. The acquisition closed in April.

Shareholders of Calabasas-based Ixia received $19.65 per share in cash, a premium of 45 percent over Ixia’s closing share price on Dec. 1, 2016.

In 2016, Ixia had total revenue of nearly $500 million. Keysight's 2016 revenue was nearly $2.9 billion.

“The combination creates a powerful innovation engine to fuel growth, expands our software-centric solutions and builds new opportunities through sales and technology leverage,” said Ron Nersesian, Keysight’s president and CEO, about Ixia.

Ixia has a broad IP (Internet protocol) portfolio that includes network communications, network visibility, and application and security software, Keysight said in describing what made the deal attractive. Ixia has extensive networking and wireless protocols that will boost Keysight’s position especially in emerging 5G (fifth generation) communications, expected for early rollout next year.

Keysight expects the fires to primarily affect the first quarter of fiscal 2018, with some effects lasting into quarters two and three. First-half revenue is expected at about $1.7 billion, and first-quarter revenue is forecast at about $780 million, “reflecting unusual seasonality due to the impact to operations from the northern California wildfires,” the company said in a statement.

“We are well aligned with the needs of our customers,” Nersesian said in a prepared statement during the company’s earnings call Wednesday. “We have a strong foundation to drive growth and earnings in 2018 and beyond.”

The company’s performance in its fourth fiscal quarter was meaningful in light of “unimaginable challenges our team faced with the Santa Rosa wildfires in October,” Nersesian said. “I am proud of how the Keysight team came together to help the community and each other.”

Out of nearly 1,100 Keysight employees in its Santa Rosa facilities, 119 lost their homes. But the company’s hundreds of manufacturing machines in four main buildings suffered minimal damage, Nersesian said. About 90 percent of the facility is already back to normal functioning, he said. Some equipment is still being cleaned and calibrated.

“I am inspired by their resiliency, acts of courage and generosity,” Nersesian said of the employees.

Keysight Technologies, a Santa Rosa-based global electronic-measurement technology company, released a scalable microwave signal generator in June that can be used to create complex waveforms needed to drive emerging 5G wireless networks that may be tested in the winter Olympics that start in February in South Korea.

James Dunn covers technology, biotech, law, the food industry, and banking and finance. Reach him at: james.dunn@busjrnl.com or 707-521-4257