) is set to report fourth quarter 2012 results on Jan 21. Last
quarter it posted an 18% positive surprise. Let's see how things
are shaping up for this announcement.
Growth Factors this Past Quarter
Though Teradyne was affected by seasonal slowdown and the
recent economic downturn, the company's sales growth rates in the
third quarter were above the year-ago comparable period and
better than management guidance due to strong demand in the
mobility market for both Semiconductor Test and LitePoint
The LitePoint business has greatly helped the company to
generate revenue from markets such as smartphones and tablets
that witness much stronger growth than the company's traditional
markets. It has also improved Teradyne's future growth prospects
due to the significant opportunities unfolding in the high-growth
However, the heavy expenditure incurred due to the launch of
new products and higher input costs resulted in lower margins for
Teradyne in the third quarter. Competitive pressures also forced
Teradyne to lower prices, aggravating the margin decline.
The Zacks Consensus Estimate for the fourth quarter stands at
1 cent while that for fiscal 2012 stands at $1.61.
Teradyne has beaten estimates in all of the last four
quarters, with a trailing four-quarter average positive surprise
of 25.8%. The biggest increase was 45.5% in the fourth quarter of
Estimate revisions have been minimal in the last 30 days, with
one upward estimate revision in the past 60 days. As a result,
the Zacks Consensus Estimate has remained unchanged for the
fourth quarter as well as for 2012 over the last 30 days. Over
the last 60 days, the Zacks Consensus has gone up by almost 100%
and 0.62% for the fourth quarter and in 2012.
The lack of downward movement in estimates signals that the
fourth quarter might not be too different from the past quarters.
Moreover, the stock carries a Zacks Rank #2 (Buy).
We caution against stocks with Zacks Ranks #4 and #5 (Sell
rated stocks) going into the earnings announcement, especially
when the company is seeing negative estimate revisions
Other Stocks to Consider
Our model states that a stock needs to have both a Positive
Earnings ESP and a Zacks Rank of #1, #2 or #3 to beat earnings
estimates. You could, however, consider stocks like:
), with Earnings
of 1.82% and Zacks Rank #2 (Buy)
), with Earnings ESP of 20.69% and Zacks Rank #3 (Hold)
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TERADYNE INC (TER): Free Stock Analysis
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