Teradyne Q3 Profit Down 22%, But Beats View; Issues Weak Q4 Outlook

(RTTNews) - Teradyne Inc. (TER) a provider of automated test equipment, on Wednesday reported a 22 percent decline in profit for the third quarter on lower revenues, and forecast results for the fourth quarter well below analysts' expectations. The company's shares declined more than 3 percent in extended trades.

However, adjusted earnings per share for the third quarter beat analysts' expectations, while revenues missed their estimates.

The company's net income for the third quarter was $69.46 million or $0.29 per share, down from $88.64 million or $0.39 per share in the year-ago period.

Excluding acquired intangible asset amortization, non-cash convertible debt interest, adjusted earnings for the latest quarter was $95.0 million or $0.46 per share, compared to $108.4 million or $0.53 per share in the prior-year quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.44 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the third quarter declined 6 percent to $433.38 million from $463.40 million in the same period last year. Analysts had a consensus revenue estimate of $444.80 million.

Gross margin for the quarter was 58.7 percent, compared to 56.2 percent in the prior-year period.

Bookings in the third quarter were $270.73 million, up 17 percent from the same period last year. However, bookings declined 43 percent from the preceding second quarter. The latest quarter's bookings include $207 million in Semiconductor Test, $40 million in Wireless Test, and $24 million in Systems Test group.

Looking ahead to the fourth quarter, Teradyne forecast earnings in a range of $0.04 to $0.08 per share, with adjusted earnings ranging between $0.00 and $0.07 per share. The company forecasts revenues in a range of $260 million to $285 million.

Analysts currently expect the company to report earnings of $0.22 per share for the quarter on revenues of $342.23 million.

Mike Bradley, CEO of Teradyne said, "Consistent with prior years, we're projecting the normal seasonal slowdown in the fourth quarter, but at somewhat higher revenue levels than we experienced at this time last year. We continue to make progress in mobility applications in both Semiconductor Test and LitePoint and will be well-positioned for any expected market growth in 2014."

TER closed Wednesday's trading at $16.34, down $0.33 or 1.98 percent on a volume of 3.40 million shares. In after-hours, the stock further declined $0.54 or 3.30 percent to $15.80.