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Keysight 2018 sales jumped nearly 22%

Nov. 26, 2018

Keysight on Nov. 20 reported its 2018 fourth quarter and full year financial results, led by strong year-over-year (YoY) gains in sales and profit for the period ended Oct. 31.

The company posted total 2018 sales of $3.88 billion, up 21.6% compared to 2017. The company had a $709 Goodwill impairment charge in 2018 that it didn’t have in 2017, leading to approximately 43%  higher total costs and expenses in 2018. Because of that, Keysight’s took a 2018 operating loss of $346 million, compared to a 2018 operating profit of $239 million. However, a $576 million income tax benefit results in a 51% total profit gain in 2018 to a figure of $165 million.

Breaking down Keysight’s 2018 full-year by its reporting segments:

  • Communications Solutions Group (CSG): CSG reported record revenue of $566 million in the fourth quarter, up 23 percent, driven by 5G-related R&D spending across the wireless ecosystem, data center next-generation 400GbE, high-speed digital test and aerospace, defense and government.
  • Electronic Industrial Solutions Group (EISG): EISG revenue grew a record 21 percent in the fourth quarter to $249 million, driven by solid double-digit growth for automotive and energy, general electronics and semiconductor measurement solutions.
  • Ixia Solutions Group (ISG): ISG revenue was $115 million in the fourth quarter, compared with $124 million in the prior year fourth quarter. ISG continued to improve sales execution; however, revenue was adversely impacted by the contract manufacturing transition.
  • Services Solutions Group (SSG): SSG revenue grew 10 percent in the fourth quarter to a record $121 million, driven by growth in calibration, remarketed and repair services and solutions.

Fourth Quarter
Looking just at the fourth quarter of 2018, Keysight posted total sales of $1.05 billion, up 19.2% YoY. The aforementioned $709 million Goodwill impairment charge was applied to Q4, resulting in a 93% percent spike in total costs and expenses and a $569 million operating loss, compared to a $39 million operating profit in Q4 2017. Keysight had a total Q4 profit loss of $114 million.

“Keysight delivered a very strong finish to a breakout year with both revenue and earnings exceeding the high-end of our guidance for the quarter,” said Ron Nersesian, Keysight president and CEO. “Revenue grew 19 percent on a GAAP basis and 16 percent on a non-GAAP basis to reach a record $1.05 billion as we continue to see broad-based momentum across multiple end markets with our solutions. Fiscal 2018 was a record year for Keysight and we are pleased with our total performance. The investments we have made over the past several years in our technology, solutions, software and services are delivering results and have enabled Keysight to be at the forefront and capture the demand we see in the market.”

2019 Q1 Outlook
Keysight is forecasting 2019 first quarter GAAP sales to be in the range of $962 million to $982 million.

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