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Apr 30, 2020
Keysight Technologies Q2 2020 Earnings Report
Keysight Technologies experienced a decrease in revenue and net income due to COVID-19 supply chain disruptions, but demonstrated strong operating margin and free cash flow.
Key Takeaways
Keysight Technologies reported a decrease in revenue and net income for Q2 2020 due to supply chain disruptions related to the COVID-19 pandemic. However, the company demonstrated strong operating margin and free cash flow, reaching a record cash balance of $1.8 billion. Production operations are ramping up and expected to be back to 100% capacity by the end of Q3.
Orders decreased by 3% year-over-year to $1,089 million.
GAAP revenue was $895 million, an 18% decrease compared to last year.
GAAP net income was $71 million, or $0.37 per share, a decrease from $153 million, or $0.80 per share, in Q2 2019.
Cash and cash equivalents totaled $1.841 billion as of April 30, 2020.
Revenue by Segment
Forward Guidance
Keysight expects continued progress in the third quarter with revenue, operating margin, and earnings expected to be in line with, or better than, the most recent quarter, assuming limited incremental supply chain constraints or disruption from additional shutdowns or a second wave of the pandemic.
Challenges Ahead
- Potential for incremental supply chain constraints.
- Risk of disruption from additional shutdowns.
- Threat of a second wave of the pandemic.
- Possible slowdown in customer purchasing.
- Potential for order cancellations.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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