Currency issues and lower revenue impacted Keysight Technologies’ quarterly results, but the company still pulled in $70 million in profit during its most recent quarter. As the company integrates test company Anite in a freshly closed $600 million transaction, Keysight President and CEO Ron Nersesian told investors that Keysight has a “strong” appetite for strategic acquisitions.
Revenue was down 12% year-over-year to $665 million, or a decrease of 9% if currency impacts and acquisitions are excluded, Keysight reported. Profits, meanwhile, were down 35% from the same period last year, but the company said it had seen significant sequential improvements in orders and expects a slightly improved outlook for the fourth quarter.
Nersesian said in Keysight’s quarterly earnings call that the company had “a strong profit performance despite a challenging market environment” and noted that it has consistently met its guidance for a half-dozen quarters, so the company feels “very good about our operational capabilities as an independent company.” Keysight was spun off from parent company Agilent last year.
Keysight continues to put effort into numerous 5G collaborations, he added, and it completed the purchase of test company Anite last week, two months ahead of schedule.
“Strategically, our focus remains on addressing the customer needs of the faster-growing market segments in electronic design and test,” Nersesian said, describing those areas as wireless communications, modular instrumentation and software solutions. He said the Anite acquisition reflected a focus on both wireless and software.
“This acquisition expands our solutions offering in wireless R&D design and test specifically into the software layer for design and validation,” Nersesian said. “Coupling Keysight’s expertise in helping customers design and test hardware, with Anite’s leadership in helping the same customers design and test software, we can now provide customers with the most comprehensive wireless solutions for both the hardware and software layers.”
He also said that Anite’s network testing business “expands Keysight into an adjacent market and increases our overall served addressable market by about $500 million.” Keysight expects the Anite purchase to deliver at least a 15% return on invested capital within the first five years.
During the Q&A portion of the call, Nersesian said that as it pertains to acquisitions, “our appetite is strong. We’re looking to grow and have the absolute strongest portfolio in the wireless communications market, the aerospace and defense market, and the industrial markets. So we’re looking and we will continue to look for strategic acquisitions.”
He went on to add that he wants to make sure that any acquisition can be effectively integrated to ensure a return.
“Once we are convinced that we could do that and take on another significant acquisition, we will follow up. But at this point, we’re not willing to give a timeframe until we see progress on the Anite acquisition,” Nersesian concluded.
Investors were pleased with the company’s results, sending the stock up more than 10% in trading Thursday.
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