) has reported second-quarter 2012 earnings of 77 cents per share,
beating the Zacks Consensus Estimate of 58 cents. The adjusted
earnings per share exclude one-time items, but include stock-based
Revenue of $548.3 million was up 38.2% sequentially, 33.6% year
over year and above management's guidance of $490-$530 million.
Around 66.6% of revenue came from semiconductor testing platforms,
with 20.4% contribution from the newly acquired LitePoint wireless
testing business and 13% from system testing.
Management also expressed optimism about the newly acquired
LitePoint wireless testing business and continued strength for the
UltraFLEX in high performance System-on-a-Chip test.
Total Bookings in the quarter were $592 million, of which $358
million were in Semiconductor Test, $189 million in LitePoint
Wireless Test and $45 million in the Systems Test Group.
Reported gross margin for the quarter was 56.4%, up 830 basis
points (bps) sequentially and 410 bps year over year. A favorable
mix led to gross margin improvement in the quarter.
Operating expenses of $152.1 million increased 32.5% year over
year. Despite this increase, the reported operating margin expanded
430 bps year over year. E&D expenses increased year over year
as a percentage of sales, with S&A declining. Moreover, higher
gross margins led to the increase in the operating margin.
The quarter's GAAP net income was $111.4 million or earnings per
share of 49 cents, down from $87.3 million or 38 cents earned in
the comparable quarter last year. Excluding special items but
including stock-based compensation expense, non-GAAP net income was
$156.3 million or earnings per share of 77 cents compared with
$103.9 million or 51 cents a share in the year-ago quarter.
The company has a fairly strong balance sheet, with cash and cash
equivalents, and marketable securities of $695.0 million, up $74.4
million from the prior quarter. Trade receivables were $346.1
million, up from $129.3 million in the prior quarter.
Cash flow from operations was $102.1 million versus $102.0 million
in the year-ago quarter. Capex was $30.7 million versus $22.3
million in the year-ago quarter.
Management provided guidance for the third quarter of fiscal 2012.
Accordingly, revenue is expected to come in at around $420-$460
million. Non-GAAP earnings from continuing operations are expected
in the range of 41 cents to 51 cents a share and GAAP earnings per
share is projected between 22 cents and 29 cents.
Teradyne reported a good second quarter, with LitePoint
experiencing record orders and revenue. We believe the addition of
LitePoint is a big positive, given the significant opportunities
unfolding in the high-growth wireless market. It also appears that
the company is seeing much higher demand across several markets,
helping both semiconductor and systems test businesses to grow.
However, the company announced a conservative guidance, reflecting
seasonally slower industry trends.
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 is expected
Currently, Teradyne has a Zacks #3 Rank, implying a short-term Hold
TERADYNE INC (TER): Free Stock Analysis Report
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