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Shifting to 5G technology

As we shift to 5G technology, networks must operate with extreme reliability and safety around 5G, making network testing and analysis a top priority.

The T&M industry is seeing a rise in 5G-related activity, even though 4G network testing has not yet ceased, since 4G networks are continuously developing; in fact, new 4G networks are currently being pushed out in several countries. Due to the close relationship between 4G and 5G, specifically the use of 4G core in a 5G radio network, and the new technical challenges associated with testing chipsets, devices, base stations, and RAN designed for mmWave spectrum, T&M vendors have had to collaborate with their NEP and operator partners to develop practical, cost-effective testing methods.

5G network testing will only become more challenging as an increasing number of devices share the wireless landscape. 5G network testing is critical for understanding, protecting, and ensuring the resiliency of network operations. Terrain, channel characteristics, user density, traffic profiles, existing 4G/5G network deployment, and available locations must all be considered. Network testing, modelling, and analysis offer a cost-effective, convenient way to obtain metrics in real-time for network planning prior to deployment.

The new 5G system environments create challenges for wired and wireless network planning, network analysis, and cyber-threat analysis. Network testing is critical across every industry.

Throughout all domains of the defense sector, there are growing concerns surrounding 5G networks and developing testbed infrastructure. Many are investing significant resources to have their labs and contractors perform testing and analysis to understand the impact of 5G networks on mission objectives.

Also, defense and commercial telecom organizations are working together to determine how to manage the old 3G/4G/LTE networks with the introduction of 5G. There are many questions and concerns about these networks and the security and infrastructure being developed. For instance, how they can work simultaneously and what security upgrades are needed, remembering that more devices create more risks. Therefore, network planners, managers, and operators are seeking new tools for network testing and analysis.

Concerns with managing how communications are working to ensure safety in an urban mobility environment are becoming critical. Linking transportation and technology is essential for safety. As we shift to 5G technology, these 5G networks must operate with extreme reliability in an urban environment containing interfering signals while retaining high relative speeds, very low latency for dynamic connections, and safety-critical message receipts. Urban mobility and safety around 5G will continue to be a challenge as these environments evolve, making network testing and analysis a top priority.

T&M manufacturers delivered another strong quarter. And the vendors are cautiously optimistic of the next two quarters too. No doubt there are risks and uncertainties. These include, but are not limited to, impacts to the supply chain; government mandates related to Covid-19 and its variants; export control regulations and compliance; net-zero emissions commitments; increasing geopolitical tensions; increases in attrition and ability to retain key personnel; changes in the demand for current and new products, technologies, and services; customer purchasing decisions and timing; and order cancellations.

Keysight Technologies, Inc. reported financial results for the second fiscal quarter ended April 30, 2022. Financial summary:

  • Orders grew 9 percent to reach USD 1.46 billion, compared with USD 1.33 billion last year, or 11 percent on a core basis, which excludes the impact of foreign currency changes and orders associated with businesses acquired or divested within the last twelve months.
  • Revenue grew 11 percent to reach USD 1.35 billion, compared with USD 1.22 billion last year, or 12 percent on a core basis, which excludes the impact of foreign currency changes and revenue associated with businesses acquired or divested within the last twelve months.
  • GAAP net income was USD 258 million, or USD 1.41 per share, compared with USD 186 million, or USD 0.99 per share, in the second quarter of 2021.
  • Non-GAAP net income was USD 334 million, or USD 1.83 per share, compared with USD 270 million, or USD 1.44 per share in the second quarter of 2021.
  • Keysight acquired approximately 1.9 million shares in the open market at an average share price of USD 153.78, for a total consideration of USD 289 million.
  • As of April 30, 2022, cash and cash equivalents totaled USD 1.89 billion.

Outlook. Keysight’s third fiscal quarter of 2022 revenue is expected to be in the range of USD 1.33 billion to USD 1.35 billion. Non-GAAP earnings per share for the third fiscal quarter of 2022 are expected to be in the range of USD 1.74 to USD 1.80. Full fiscal year 2022 revenue growth is expected to approach 8 percent. Non-GAAP earnings per share growth for fiscal year 2022 are expected to be in the range of 14 to 15 percent.

Satish Dhanasekaran
President and CEO,

Keysight

“The Keysight team delivered another strong quarter (ended April 2022), exceeding the high end of our revenue and EPS guidance. Demand for our broad-based portfolio of differentiated solutions remains strong. We executed well and successfully navigated the geopolitical and supply chain challenges within the quarter. Our consistent performance is a testament to our strategy, our people, and the resilience of our business, and gives us confidence in our raised outlook for the year.”

Oleg Khaykin
President and Chief Executive Officer,

VIAVI

“In fiscal Q3, VIAVI achieved new highs in revenue and non-GAAP operating profit for a March quarter. Business strength was led by fiber and wireless products with anti-counterfeiting and 3D sensing products demand recovering from the December quarter. Revenue came in at USD 315.5 million, up 4.0 percent year-over-year, exceeding our guidance range of USD 301 to USD 315 million.
As we look ahead, we expect fiscal 2022 to be another record year for revenue and profitability. We also continue to execute well on our plan to improve our capital structure to enable us to achieve financial flexibility. During fiscal Q3, we redeemed an additional USD 50.0 million in convertible notes, which brings us to a cumulative principal retirement of 54 percent in fiscal 2022.”

Eric Starkloff
NI president and CEO

“Demand exceeded expectations in the first quarter with record orders for a first quarter up 27 percent year-over-year. Orders serve as the leading indicator in our business and a direct result of our strategic initiatives. Our focus on high-growth areas, such as electric and autonomous vehicles, wireless communications, and new space technologies, brings us confidence in our ability to grow faster than the overall market. The flexible, modular test solutions we provide are built on our leading interoperable software that enables customers to automate their test processes to bring their products to market faster and with high quality.”

VIAVI reported results for its third fiscal quarter ended April 2, 2022.

Third quarter of fiscal 2022 net revenue was USD 315.5 million. GAAP net income was USD 19.2 million, or USD 0.08 per share. Non-GAAP net income was USD 52.0 million, or USD 0.22 per share.

Second quarter of fiscal 2022 net revenue was USD 314.8 million. GAAP net income was USD 34.6 million or USD 0.14 per share. Non-GAAP net income was USD 59.3 million, or USD 0.24 per share.

Third quarter of fiscal 2021 net revenue was USD 303.4 million. GAAP net income was USD 17.2 million, or USD 0.07 per share. Non-GAAP net income was USD 42.3 million, or USD 0.18 per share.

Financial overview for the quarter ended April 2, 2022:

  • Americas, Asia-Pacific, and EMEA customers represented 34.5 percent, 36.3 percent, and 29.2 percent, respectively, of total net revenue.
  • The company held USD 596.0 million in total cash, short-term restricted cash, and short-term investments.
  • The company generated USD 28.9 million of cash from operations.

Outlook. For the fourth quarter of fiscal 2022 ending July 2, 2022, the company expects net revenue to be between USD 315 million and USD 329 million and non-GAAP earnings per share to be between USD 0.22 and USD 0.24.

National Instruments Corporation announced Q1 2022 revenue of USD 385 million, up 15 percent year-over-year, a record for a first quarter.

For Q1 2022, the value of the company’s total orders was up 27 percent year-over-year. For Q1, year-over-year orders in the Americas region were up 40 percent, in EMEA orders were up 22 percent, and in APAC orders were up 17 percent.

In Q1, GAAP gross margin was 69 percent and non-GAAP gross margin was 71 percent. GAAP operating expenses were USD 235 million, up 2 percent year-over-year. Total non-GAAP operating expenses were up 3 percent year-over-year at USD 208 million. GAAP operating margin was 8 percent in Q1, with GAAP operating income of USD 31 million, up 220 percent year-over-year. Non-GAAP operating margin was 17 percent in Q1, with non-GAAP operating income of USD 66 million, up 28 percent year-over-year.

GAAP net income for Q1 was USD 25 million, with diluted earnings per share (EPS) of USD 0.19, and non-GAAP net income was USD 54 million, with non-GAAP diluted EPS of USD 0.41.

As of March 31, 2022, NI had USD 143 million in cash and cash equivalents. During Q1, NI paid USD 37 million in dividends and repurchased approximately 772,000 shares of common stock at an average price of USD 40.74 per share. The NI Board of Directors approved a dividend of USD 0.28 per share payable on May 31, 2022, to stockholders of record on May 9, 2022.

The greatest challenge in the current market continues to be component supply. Manufacturing and transport disruptions, resulting from the Covid pandemic, appear to be a long way from abating. This has put upward pressure on component pricing, which in turn is pushing measurement equipment pricing higher.

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