Tech Stock Under Pressure: Keysight Technologies Inc (NYSE: KEYS)

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Keysight Technologies Inc (NYSE: KEYS) stock fell 2.06% on November 18th, 2020 and continued its bearish momentum falling over 0.04% in the pre-market session of November 19th, 2020 (as of  7:59 pm GMT-5 ; Source: Google finance) despite decent fourth quarter of FY 20 performance.

Total Keysight orders exceeded revenue in the fourth quarter with the book-to-bill just over 1. The company delivered a record $1.231 billion in orders, up 3% or 1% on a core basis. The company reported gross margin of 66% and operating expenses of $446 million resulting in operating margin of 29%, which is an all-time quarterly high. Net income was a record $305 million compared to $254 million in the fourth quarter of 2019. At the end of October, 2020, cash and cash equivalents were of total $1.76 billion.

Moreover, Communication Solutions Group posted 8% rise in revenue to $901 million. In Q4, commercial communications generated 5% increase in revenue to $605 million, on the back of strength across the 5G ecosystem from development to early manufacturing, Gen5 high-speed digital applications and data center related 400 gigabit and 800 gigabit technology. Aerospace, defense and government revenue rose 13% to $296 million due to strength in the Americas and Asia with improvement in Europe.

KEYS in the fourth quarter of FY 20 has reported the adjusted earnings per share of $1.62, while reported the adjusted revenue growth of 9 percent to $1.22 billion in the fourth quarter of FY 20. The revenue growth is driven by continued demand in areas such as 5G, semiconductor measurement, and aerospace defense where the company is having leading positions and differentiated solutions. The demand for general electronics grew significantly in the fourth quarter driven by regional economic recovery, particularly in Asia.

Additionally, KEYS has authorized a new share repurchase program for up to $750 million of its common stock. The company had acquired about 2.2 million shares in the open market at an average share price of $96.55, for a total consideration of $215 million, exhausting the $500 million share repurchase authorization from May 2019.

For the first fiscal quarter of 2021, the company expects revenue to be in the range of $1.14 billion to $1.16 billion. Non-GAAP earnings per share for the first fiscal quarter of 2021 are expected to be in the range of $1.32 to $1.38.

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