Keysight Technologies Inc (NYSE:KEYS) stock fell 10.15% (As on May 21, 11:22:47 AM UTC-4, Source: Google Finance) after the company forecast third-quarter profit below estimates, anticipating slow demand in electronics industrial markets amid high borrowing costs. Communications Solutions Group (CSG) reported revenue of $840 million in the second quarter, down 10 percent from the prior year, reflecting a 10 percent decline in commercial communications, while aerospace, defense, and government decreased 11 percent. On the demand front, orders were flat year-over-year and grew four percent on a sequential basis. Wireline orders grew on robust demand for our differentiated AI data center solutions. These include a new AI Test Platform that is being used by several industry leaders to emulate AI workloads and benchmark network performance.
Moreover, Electronic Industrial Solutions Group (EISG) reported revenue of $376 million in the second quarter, down 17 percent from the prior year, reflecting continued constraint in semiconductor and manufacturing-related customer spending. The orders and revenue continued to normalize from a record prior year, declining double digits as expected. Customer spending and market conditions remain muted. In semiconductor, the industry outlook is improving with projections of recovery in 2025. Inventories are coming down to more healthy levels, and demand is picking up in certain areas, such as highband width memory.
Non-GAAP net income was $247 million, or $1.41 per share, compared with $380 million, or $2.12 per share in the second quarter of 2023. Cash flow from operations was $110 million, compared to $423 million last year. Free cash flow was $74 million, compared to $370 million in the second quarter of 2023. As of April 30, 2024, cash and cash equivalents totaled $1.66 billion.
KEYS in the second quarter of FY 24 has reported the adjusted earnings per share of $1.41, beating the analysts’ estimates for the adjusted earnings per share of $1.39. The company had reported the adjusted revenue of $1.22 billion in the second quarter of FY 24, beating the analysts’ estimates for revenue of $1.20 billion.
Keysight’s third fiscal quarter of 2024 revenue is expected to be in the range of $1.18 billion to $1.20 billion, below analysts’ estimate of $1.21 billion. Non-GAAP earnings per share for the third fiscal quarter of 2024 are expected to be in the range of $1.30 to $1.36, based on a weighted diluted share count of approximately 175 million shares. This is below analysts’ estimate of earnings of $1.45 per share, according to LSEG data.