Teradyne Inc. ( TER ) reported
first-quarter 2013 earnings of 9 cents per share, beating the Zacks
Consensus Estimate of 3 cents. Adjusted earnings per share exclude
one-time items but include stock-based compensation expense.
Revenues of $280.4 million were up 12.9% sequentially but down
29.3% year over year and slightly above management's guidance of
$260.0-$280.0 million due to improving demand.
Around 75.4% of revenues in the quarter came from semiconductor
testing platforms, 12.6% from system testing and the remaining
12.1% from the LitePoint wireless testing business.
Total bookings in the quarter amounted to $400.0 million, of which
$259.0 million were in Semiconductor Test, $109.0 million in
Wireless Test and $32 million in the Systems Test Group.
Total orders were up 47% sequentially, driven by a 42% increase in
Semiconductor Test orders and 322% increase in Wireless Test
Reported gross margin for the quarter was 54.7%, up 420 basis
points (bps) sequentially and 660 bps year over year. Higher
volumes led to gross margin expansion in the quarter.
Operating expenses of $130.7 million were up 2.2% from $127.9
million in the year-ago quarter. The reported operating margin was
1.6%, down significantly from 11.7% in the year-ago quarter. Both
engineering and development (E&D) expenses and selling and
administrative (S&A) expenses increased as a percentage of
The quarter's GAAP net income was $6.6 million or earnings per
share of 3 cents, down from a net income of $33.6 million or 15
cents in the comparable quarter last year. Excluding special items
but including stock-based compensation expense, non-GAAP net income
was $18.2 million or 9 cents per share compared with $60.2 million
or 30 cents a share in the year-ago quarter.
The company ended the first quarter with cash and cash equivalents
and marketable securities balance of $770.0 million, roughly flat
sequentially. Trade receivables were $166.6 million, up from $153.4
million in the prior quarter.
Cash flow from operations was ($36.5) million versus $11.2 million
in the year-ago quarter. Capex was $22.5 million versus $27.1
million in the year-ago quarter.
Management also provided guidance for the second quarter of 2013.
Accordingly, revenues are expected to come in at around $380-$420
million, up 48.1% sequentially at the mid-point. Non-GAAP earnings
from continuing operations are expected to be 26 to 36 cents a
share and GAAP earnings per share are expected to be 12 to 20 cents
Teradyne is a leading provider of automated test equipment. The
company reported a good quarter, with earnings beating the Zacks
In the last quarter, the company reported higher orders and also
raised its second quarter guidance, indicating macro visibility and
improved demand for Teradyne products in the future.
We also believe the addition of LitePoint is a big positive going
forward, given the significant opportunities unfolding in the
high-growth wireless market. 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 should continue.
Currently, Teradyne has a Zacks Rank #3 (Hold). Investors can also
consider some other stocks with positive Zacks Rank and Expected
Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method ) such
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