Santa Rosa-based Keysight Technologies (NYSE: KEYS) posted strong gains across its core business areas for the fiscal first quarter, noting growth in its 5G wireless data and software sectors and that results surpassed its own earnings and revenue estimations.
The company, which manufactures electronic test and measurement equipment and software, also announced Thursday that one of its divisions, Ixia, which it acquired in 2017, had completed what it called a 5G user equipment emulation solution. Keysight described the new product, touted as a 5G testing process, in a statement as a ”end-to-end, scalable testing of 5G base stations to ensure that devices and network services meet customer expectations for latency, reliability, and high-speed broadband at scale.”
5G, or fifth generation, is the cutting edge of cellular mobile communications being developed to replace the currently commercially available 4G. AT&T plans to stop serving 3G phones in early 2022, and Verizon plans to drop service at the end of this year, according to the Wall Street Journal.
“Keysight delivered an outstanding first quarter,” said President and CEO Ron Nersesian during a call Thursday to discuss the results.
Nersesian noted orders grew 5 percent over the previous quarter and revenue per generally accepted accounting principles grew 20 percent to reach $1.006 billion, compared with $837 million during the same period last year.
The company’s quarterly net income was $114 million, or 60 cents per share. That increased 21 percent from $94 million, or 50 cents per share, in the first quarter of 2018.
Nersesian noted some 2018 numbers were depressed because of the 2017 Tubbs Fire that caused an evacuation of the Santa Rosa headquarters.
“Software is becoming a larger part of our differentiation and business,” Nersesian added, noting demand for the company’s 5G technology, high-frequency measurement software and digital and photonic energy software.
The company reported growth across its three key business focuses. Its Communications Solutions Group, handling 5G networks as well as aerospace defense and government work, reported revenues rose by 25 percent, to $623 million.
The Electronics Industrial Solutions Group saw revenues climb by 13 percent in the fiscal first quarter, to $257 million, driven by demand for the company’s products in the automotive industry and despite a slowdown in the semiconductor market.
The Ixia Solutions Group saw revenues of $129 million in the first quarter, compared with $127 million in the prior year first quarter. Electronic-testing revenue remained in line with the previous year.
The overall growth beat expectations, according to Neil Dougherty, senior vice president and chief financial officer. He said he expected continued growth in the second quarter of the year but cautioned “we normally see a sequential decline” from the second quarter through the third quarter followed by an uptick in the fourth quarter.
The price of Keysight stock was $81.75 a share at the end of the Thursday session, up nearly 1 percent, and growth in after-market trading was over 2 percent.
Staff Writer Chase DiFeliciantonio covers technology, banking, law, accounting, and the cannabis industry. Reach him at email@example.com or 707-521-4257.