KEYS Set to Report Q3 Results: Will Revenue Growth Boost Earnings?

Keysight Technologies, Inc. KEYS is scheduled to report third-quarter fiscal 2025 results on Aug. 19, after the closing bell. It pulled off a trailing four-quarter earnings surprise of 8.19%, on average.

Based in Santa Rosa, CA, the electronic design company is expected to report higher year-over-year revenues, backed by strength in the AI data center market; aerospace, defense and government end markets; and healthy momentum in software and services. Management’s focus on expanding its business through collaborations with established sector players is another positive.

Factors at Play

During the quarter, Keysight announced that AMD has utilized Keysight's solution to test electrical compliance for pre-production AMD server CPUs. AMD has leveraged Keysight’s 64 GBaud High Performance BERT and its 59 GHz UXR-Series Oscilloscope and pre-compliance software during the process.

In the quarter under review, Keysight collaborated with Synopsis to address one of the major pain points in radio frequency chip design. Migration of analog and RF circuits to new process nodes is a time-consuming endeavor. The AI-powered RF design migration flow jointly built by KEYS and Synopsis streamlines the process and ensures faster time to market. These advancements are expected to generate incremental demand for Keysight’s solutions.

The company announced that Japanese technology giant Fujitsu has opted to deploy the Keysight Quantum Control System in its 256-qubit superconducting quantum computer. It has also delivered the world’s largest commercial quantum control system to the National Institute of Advanced Industrial Science and Technology in Japan. These developments highlight Keysight’s growing prowess in Quantum Computing. This is expected to have a favorable impact on the third-quarter earnings.

Overall Expectations

Our estimate for revenues from the Communications Solutions Group segment is pegged at $909.4 million, suggesting 7.4% year-over-year growth. Revenues from the Electronic Industrial Solutions Group vertical are projected to be $401.3 million.

For the third quarter of fiscal 2025, the Zacks Consensus Estimate for revenues is pegged at $1.31 billion, indicating year-over-year growth from $1.22 billion. The consensus estimate for adjusted earnings per share is pegged at $1.68, suggesting an improvement from $1.57 reported a year ago.

Earnings Whispers for KEYS Stock

Our proven model does not conclusively predict an earnings beat for Keysight in the fiscal third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, this is not the case here.

KEYS’ Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.68. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Keysight Technologies Inc. Price and EPS Surprise

Keysight Technologies Inc. price-eps-surprise | Keysight Technologies Inc. Quote

KEYS’ Zacks Rank: Keysight currently has a Zacks Rank #3.

Stocks to Consider

Fabrinet FN is set to release quarterly numbers on Aug. 18. It currently has an Earnings ESP of +1.14% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Analog Devices ADI is slated to release quarterly numbers on Aug. 20. It has an Earnings ESP of +0.72% and a Zacks Rank #2 at present.

Walmart WMT is set to release quarterly numbers on Aug. 21. It currently has an Earnings ESP of +4.95% and a Zacks Rank #2.

Want 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

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research