Bullish stock to watch: Keysight Technologies Inc (NYSE: KEYS)

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Keysight Technologies Inc (NYSE: KEYS) stock surged over 2.9% on 27 November pre market session (as of 8:14 am GMT-5; Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 19. In the fourth quarter, delivered a record $1,194 million in orders, up 6% in total, and 7% on a core basis. The company in Q4 has reported record gross margin of 64% and operating expenses of $426 million, which led to an operating margin of 26%, the highest quarterly operating margin in Keysight’s history. The company has reported 31% growth in the net income to $254 million. KEYS ended the fourth quarter with $1.6 billion in cash and cash equivalents and generated cash flow from operations of $263 million, and free cash flow of $233 million.

Moreover, Communications Solutions Group delivered record revenue 7% increase to $706 million while delivering a gross margin of 63% and an all-time high operating margin of over 28%.

In Q4, commercial communications the company has posted the record revenue of $443 million, which is up 9% due to strength across the wireless ecosystem as 5G investment continues to build. Aerospace defense and government posted the revenue of $263 million, which is an increase of 5% on a core basis versus the prior all-time high in Q4 last year.

The growth is driven by U.S. government year-end spending and continued investment in China, which is offset by softness in Europe and the rest of Asia. Orders for this end market has posted the growth of double-digits and the company continue to see investment in advanced technology modernization and solutions such as cyber electromagnetic activities

KEYS in the fourth quarter of FY 19 has reported the adjusted earnings per share of $1.33, beating the analysts’ estimates for the adjusted earnings per share of $1.18, according to analysts surveyed by Zacks Investment Research. The company had reported the adjusted revenue growth of 7 percent to $1.12 billion in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $1.1 billion.

Additionally, during the fourth quarter, the company has acquired approximately 300,000 shares at an average price of $98.30 for a total consideration of approximately $30 million, under the share repurchase authorization.

For the first quarter ending in February, Keysight expects its per-share earnings to be in the range of $1.04 to $1.10. The company expects revenue to be in the range of $1.05 billion to $1.07 billion for the fiscal first quarter.

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