Santa Rosa-based Keysight Technologies (NYSE: KEYS) on Wednesday posted revenue and net income gains during the second fiscal quarter of the year, showing growth across its three main reporting segments.
The company, which manufactures electronic test and measurement equipment and software, reported its quarterly revenue grew 10% to over $1 billion, compared with $990 million during the three months ended in April 2018.
Keysight’s quarterly net income also grew, up 139% to $153 million, compared with $64 million a year earlier.
In response to a question during an investor call Wednesday, Senior Vice President & Chief Financial Officer Neil Dougherty said: “I think in Q2 we did see a very favorable mix in our revenue during the quarter, both from software, which grew faster than the overall rate of growth of the total business, as well as some very favorable mix in some of our solutions platforms that were added into gross margins.”
In a statement released along with the results, Keysight Chief Executive Officer and President Ron Nersesian said, “In the second quarter, we saw growth across most end markets as customers continued R&D investments in next-generation technologies. We are capturing a significant portion of the demand we see in the marketplace with our broad and differentiated portfolio of solutions, software and services.”
Nersesian noted in the investor call Wednesday that recent U.S. Department of Commerce export control regulations aimed at China and telecom giant Huawei limiting export of 5G technology will likely have an impact on future revenue, although the company expects continued growth for the rest of the year.
5G, or fifth generation, is the cutting edge of cellular mobile communications being developed to replace the currently commercially available 4G.
Dougherty said a Chinese customer accounted for almost 5% of its revenue in the first half of 2019. While it would lose that business, Keysight still expected 7% to 8% revenue growth for the year, he said.
The company’s Communications Solutions Group, which handles 5G networks as well as aerospace defense and government work, reported $676 million in revenue in the quarter, an increase of 8%. That was driven by demand for 5G research and development and digital testing, the company said.
Keysight’s Electronic Industrial Solutions Group saw revenue of $299 million in the second quarter, up 6%, thanks to growth in its automotive work as well as general electronics and parametric testing.
Ixia Solutions Group, which Keysight acquired in 2017, had revenue of $118 million in the second quarter, up 32% from $90 million a year before, “driven by application and security sales along with large visibility renewals.”
The company also announced a new share-repurchase program for up to $500 million of its common stock, replacing a $350 million program from 2018, of which $160 million remained.
Keysight’s stock price was $71.41 a share at the end of the Wednesday session, down 2.2% from $73.08 at the end of trading Tuesday.