Keysight Technologies Inc (NYSE:KEYS) stock surges 12.13% (As on August 21, 11:25:42 AM UTC-4, Source: Google Finance) after the company  offered a fiscal fourth-quarter forecast that came in above Wall Street’s expectations, helped by a “stable” backdrop for tech spending. In May, Keysight executives said spending on areas like artificial intelligence and defense-system upgrades helped its financials. But they said the semiconductor industry, while improving, was still facing project delays, and added that spending was “constrained” in electronics, particularly as China’s economy remains shaky. As per the company, The funnel of opportunities supports our outlook for second-half orders to be above first-half orders, followed by a more gradual recovery in 2025, barring any further macroeconomic degradation. Keysight reported results as the backdrop for tech spending remains mixed after a stronger 2023 for the company and many of its peers, and as businesses navigate an economy that has, for now, defied persistent worries of a recession. Non-GAAP net income was $275 million, which includes a 16-cent year-to-date benefit due to a change in non-GAAP tax rate, compared with $393 million, in the third quarter of 2023. Cash flow from operations was $255 million, compared to $241 million last year. Free cash flow was $222 million, compared to $196 million in the third quarter of 2023. As of July 31, 2024, cash and cash equivalents totaled $1.63 billion.

Moreover, Communications Solutions Group (CSG) reported revenue of $847 million in the third quarter, down 8 percent from the prior year, reflecting a 6 percent decline in commercial communications, while aerospace, defense, and government decreased 10 percent. Electronic Industrial Solutions Group (EISG) reported revenue of $370 million in the third quarter, down 20 percent from the prior year, reflecting continued restraint in general electronics, automotive, and manufacturing-related customer spending.

KEYS in the third quarter of FY 24 has reported the adjusted earnings per share of $1.57, beating the analysts’ estimates for the adjusted earnings per share of $1.35. The company had reported the adjusted revenue decline of 12 percent to $1.22 billion in the third quarter of FY 24, beating the analysts’ estimates for revenue of $1.19 billion.

For the fourth quarter, Keysight expects adjusted EPS of $1.53 to $1.59 above analysts’ forecasts for $1.54, on revenue between $1.245 billion and $1.265 billion, with the midpoint of that range just above FactSet analyst estimates for $1.251 billion.