Keysight Technologies, Inc. (NYSE:KEYS) Q1 2018 Earnings Conference Call Transcript

Mar 01, 2018 • 04:30 pm ET

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Keysight Technologies, Inc. (NYSE:KEYS) Q1 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to Keysight Technologies Fiscal First Quarter 2018 Earnings Conference Call. My name is Christine, and I'll be your lead operator today. After the presentation, we will conduct the question-and-answer session. (Operator Instructions) Please note, this conference call is being recorded today, Thursday, March 1, 2018, at 1:30 p.m. Pacific Time.

I would now like to hand the conference over to Jason Kary, VP, Treasurer and IR. Please go ahead, Mr. Kary.

Executive
Jason Kary

Thank you, and welcome, everyone, to Keysight's First Quarter Earnings Conference Call for Fiscal Year 2018. Joining me are Ron Nersesian, Keysight President and CEO; and Neil Dougherty, Keysight's SVP and CFO. Joining us in the Q&A session will be Mark Wallace; SVP of Worldwide Sales; and Satish Dhanasekaran, President of the Communications Solutions Group who's calling in from Barcelona, where he has been for Mobile World Congress this week. You can find the press release and information to supplement today's discussion on our website at investor.keysight.com. While there, please click on the link for quarterly reports under the financial information tab. There, you will find an investor presentation along with Keysight's segment results. Following this conference call, we will post a copy of the prepared remarks to the website.

As always, today's comments by Ron and Neil will refer to non-GAAP financial measures. You will find the most directly comparable GAAP financial metrics and reconciliations on our website.

(Forward-Looking Cautionary Statements)

Lastly, I would highlight that we are hosting our Investor Day next Tuesday on March 6 at The New York Stock Exchange and we're really looking forward to seeing many of you there.

And now, I'd like to turn the call over to Ron.

Executive
Ron Nersesian

Thank you, Jason, and thank you all for joining us. We delivered an outstanding first quarter with both revenue and earnings exceeding our guidance and we're pleased with our performance and growing leadership position in the market. I'll focus my formal comments on three key headlines for the quarter.

First, 2018 is off to a great start, and we delivered a strong quarter across the board. Our better than expected results this quarter were driven by robust order growth as well as the strength of our execution.

Second, customers are increasing their R&D investments in next-generation technologies, and we have continued to build momentum across multiple end markets, contributing to four consecutive quarters of accelerating order growth.

And third, Keysight's transformation strategy is delivering results. With our strong performance in the first quarter, we are raising our guidance for the first half of the year. Additionally, our order growth and backlog expansion over the past several quarters has established a strong foundation to drive revenue and earnings growth in 2018.

Let's take a deeper look into our performance for the quarter. We achieved earnings of $0.51 per share, which was $0.15 above the midpoint of our guidance and exceeded the high end of our guidance range.

We delivered outstanding order growth this quarter. Orders grew 39% in