) has reported third-quarter 2012 earnings of 53 cents per share,
crushing the Zacks Consensus Estimate of 45 cents. Adjusted
earnings per share exclude one-time items, but include
stock-based compensation expense.
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TERADYNE INC (TER): Free Stock Analysis
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Revenue of $463.4 million was up 34.6% year over year and above
the management's guidance range of $420-$460 million. Around
67.0% of revenue in the quarter came from semiconductor testing
platforms, 25.7% from LitePoint wireless testing business and the
remaining 7.3% from system testing.
As per management, revenue exceeded the guidance on the back of
strong demand in the mobility market for both Semiconductor Test
and LitePoint products.
Total Bookings in the quarter were $231 million, of which $154
million were in Semiconductor Test, $52 million in LitePoint
Wireless Test and $25 million in the Systems Test Group.
Total orders were down 61% sequentially and 4% from the year-ago
quarter due to seasonal slowdown and a weak macro economic
Reported gross margin for the quarter was 56.2%, up 670 bps year
over year. A favorable mix and higher revenue led to higher gross
margin in the quarter.
Operating expenses of $152.1 million were roughly flat year over
year. Reported operating margin was 23.3%, up from 17.6% in the
year-ago quarter. The margin improvement was aided by
year-over-year decline in engineering and development (E&D)
expenses and selling and administrative (S&A) expenses.
However, E&D expenses increased as a percentage of sales.
The quarter's GAAP net income was $88.6 million or earnings per
share of 39 cents, up from $56.7 million or 26 cents earned in
the comparable quarter last year. Excluding special items but
including stock-based compensation expense, non-GAAP net income
was $108.4 million or earnings per share of 53 cents compared
with $68.1 million or 35 cents a share in the year-ago quarter.
Balance Sheet & Cash Flow
The company has a fairly strong balance sheet, with cash and cash
equivalents and marketable securities of $830.5 million, up
$135.5 million from the prior quarter. Trade receivables were
$205.5 million, down from $346.1 million in the prior quarter.
Cash flow from operations was $249.0 million versus $93.0 million
in the year-ago quarter. Capex was $33.3 million versus $22.2
million in the year-ago quarter.
Management provided guidance for the fourth quarter of fiscal
2012. Accordingly, revenue is expected to come in at around
$235-$260 million. Non-GAAP earnings (loss) from continuing
operations are expected to be (4) to 5 cents a share and GAAP
loss per share is likely to be 12 to 5 cents.
Teradyne is a leading provider of automated test equipment. The
company reported a decent quarter, with earnings beating the
Zacks Consensus Estimate.
We believe that the company is witnessing higher demand across
several markets, which is helping both, semiconductor and
LitePoint, to grow.
However, the company announced a conservative guidance,
reflecting seasonally slower industry trends and an overall weak
We remain optimistic about Teradyne in the longer term, given the
popularity of its products, the LitePoint acquisition that
further rounds out its portfolio and design win momentum that
Increasing competition from
) is also a matter of concern. Currently, Teradyne has a Zacks #3
Rank, implying a short-term Hold rating.