We expect semiconductor company
) to beat expectations when it reports second quarter 2013
results on Jul 24.
Why a Likely Positive Surprise?
Our proven model shows that Teradyne is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP
: The expected surprise prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is +12.12%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Zacks Rank #3 (Hold):
Note that stocks with a Zacks Rank #1, #2 and #3 have a
significantly higher chance of beating earnings estimates. The
sell-rated stocks (Zacks Rank #4 and #5) should never be
considered going into an earnings announcement.
The combination of Teradyne's Zacks Rank #3 (Hold) and an ESP
of+12.12% makes us reasonably confident in looking for a positive
earnings beat on Jul 24.
What is Driving the Better than Expected Earnings?
Teradyne'snew products, lean cost structure and strong
execution are expected to lead to a positive earnings surprise in
the upcoming quarter. Also, the company saw some progress around
its bookings in the last quarter, which indicates that revenues
will pick up soon.
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. It has also improved Teradyne's future growth prospects
due to the significant opportunities unfolding in the high-growth
Teradyne provided a modest outlook for the second quarter,
with revenues forecast to increase in the range of $260 million
to $280 million (up 9.1% sequentially). The positive trend is
seen in the trailing four-quarter average surprise of
Other Stocks to Consider
Teradyne is not the only firm looking up this earnings season.
We also see likely earnings beats coming from these
INVENSENSE INC (INVN): Free Stock Analysis
SCIENTIFIC GAME (SGMS): Free Stock Analysis
SYNTEL INC (SYNT): Free Stock Analysis Report
TERADYNE INC (TER): Free Stock Analysis
To read this article on Zacks.com click here.
), with an ESP of +0.82% and a Zacks Rank #1 (Strong Buy)
), Earnings ESP of +8.33% and a Zacks Rank #2 (Buy)
Scientific Games Corp.
), with an ESP of +100.0% and a Zacks Rank #3 (Hold)