News Column

Teradyne Q2 Results Top Estimates, Guides Q3 Below View

July 23, 2014

WASHINGTON (dpa-AFX) - Automated test-equipment maker Teradyne, Inc. (TER) reported Wednesday a profit for the second quarter that increased from last year, reflecting improved operating margins and double-digit revenue growth. Both adjusted earnings per share and quarterly revenues topped analysts' expectations. However, the company provided earnings and revenue guidance for the third quarter, below Street view.

"Our strong sales and earnings growth reflect both the short time to market requirements of chip makers and our operating model's ability to flex to meet customer demand," President and CEO Mark Jagiela said in a statement.

The North Reading, Massachusetts-based company reported net income of $101.21 million or $0.47 per share for the second quarter, higher than $66.56 million or $0.28 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $116.4 million or $0.54 per share, compared to $89.1 million or $0.43 per share in the year-ago quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.42 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenue for the quarter increased 23 percent to $525.57 million from $428.89 million in the same quarter last year, and topped thirteen Wall Street analysts' consensus estimate of $479.51 million.

Revenues included $422 million from semiconductor test, $69 million from wireless test and $35 million in system test.

Operating margin for the quarter expanded 300 basis points to 23.0 percent from a year ago, despite a 90 basis points decline in gross profit margin, as operating expenses dropped.

Operating expenses for the quarter grew to $169.75 million from $155.33 million in the year-ago quarter.

Bookings in the second quarter were $627 million of which $535 million were in semiconductor test, $52 million in the wireless test and $40 million in systems test. Orders for the quarter grew 32 percent to $627 million from $474 million last year.

"Company and Semiconductor Test orders in the second quarter were the highest in over ten years. Semiconductor Test orders were driven by a combination of capacity expansion and new design wins with the strongest demand from applications processor, power management, microcontroller and memory test," Jagiela added.

The company noted that its third quarter outlook reflects the industry's normal seasonal patterns after the strongest first half of orders since 2004.

Looking ahead to the third quarter, the company expects adjusted earnings in a range of $0.34 to $0.43 per share, on projected quarterly revenues between $440 million and $480 million.

Street is currently looking for earnings of $0.49 per share for the quarter, on revenues of $487.33 million.

TER closed Wednesday's regular trading session at $19.26, down $0.58 or 2.92% on a volume of 2.84 million shares.

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Source: dpa-AFX International Compact

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