Teradyne Inc. (
) is set to report first quarter 2013 results on Apr 24. Last
quarter it posted a 600% positive surprise. Let's see how things
are shaping up for this announcement.
Growth Factors this Past Quarter
The company's sales declined sequentially as well as year over
year due to a seasonal slowdown and the recent economic downturn.
The company saw some progress around its bookings, which indicate
that revenues could pick up soon.
However, the heavy expenditure incurred due to the launch of new
products and lower volumes resulted in lower margins for Teradyne
in the fourth quarter. Competitive pressures also forced Teradyne
to lower prices, further hurting the margin.
In the past quarters, the LitePoint business has greatly helped
the company to generate revenues from markets such as smartphones
and tablets that witness much stronger growth than the company's
traditional markets. We believe the LitePoint wireless testing
business will continue to improve Teradyne's future growth
prospects due to the significant opportunities unfolding in the
high-growth wireless market.
The Zacks Consensus Estimate for the first quarter stands at 3
cents while that for fiscal 2013 stands at $1.34.
Teradyne has beaten estimates in all of the last four quarters,
with a trailing four-quarter average positive surprise of
164.42%. The biggest increase was the 600.0% surprise in the
fourth quarter of 2012.
There have been no estimate revisions in the last 30 and 60 days.
For the first quarter, the Zacks Consensus Estimate has remained
unchanged over the last 30 as well as 60 days. On the contrary,
for 2013, the Zacks Consensus Estimate has gone down by almost
4.3% each over the last 30 days.
Currently, the stock carries a Zacks Rank #3 (Hold).
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 momentum.
Other Stocks to Consider
Our model states that a stock needs to have both a positive
earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a
Zacks Rank #1, #2 or #3 to beat earnings estimates. You could,
therefore, consider the following stocks instead:
Applied Materials, Inc. (
), Earnings ESP of +7.69% and Zacks Rank #2 (Buy)
Intersil Corp. (
), with an ESP of +62.5% and a Zacks Rank #3 (Hold)
), Earnings ESP of +100.0% and Zacks Rank #3 (Hold)
APPLD MATLS INC (AMAT): Free Stock Analysis
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INTERSIL CORP (ISIL): Free Stock Analysis
TERADYNE INC (TER): Free Stock Analysis
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