Keysight Technologies Inc. shares advanced 2.6% in pre-market trading on Wednesday after the company reported fiscal third-quarter results that exceeded analyst projections, driven by robust demand for AI-related testing solutions.
The company posted adjusted earnings per share of $3.07, surpassing the consensus estimate of $2.48. Revenue reached $1.85 billion, above the $1.75 billion forecast. Orders climbed 56% year-over-year to $2.09 billion, significantly outpacing market expectations as demand for AI infrastructure testing solutions strengthened.
Free cash flow totaled $403 million, while the company executed a substantial share repurchase program. Operating margins expanded by more than 800 basis points year-over-year, reflecting improved operational efficiency.
Within the Communications Solutions Group segment, commercial communications revenue rose 56%. The wireline business, fueled by AI data center buildouts, surpassed wireless revenue for the first time in company history. This shift underscored the accelerating investment in AI infrastructure.
Keysight provided forward guidance for the fourth quarter, projecting revenue between $1.93 billion and $1.95 billion, well above the $1.82 billion consensus. Adjusted earnings per share for the quarter were forecast between $3.34 and $3.40, exceeding the $2.68 estimate. For the full fiscal year, the company reaffirmed its revenue guidance while raising its adjusted EPS outlook.
Morgan Stanley maintained a price target of $400 on Keysight shares, reflecting continued confidence in the company’s growth trajectory amid expanding AI-related demand.
Broader equity markets showed modest gains in pre-market trading, with the S&P 500 up 0.1%, the Dow Jones gaining 0.02%, and the Nasdaq advancing 0.1%.
