Teradyne Q3 Results Top Estimates, Guides Q4 Below View

(RTTNews) - Automated test-equipment maker Teradyne, Inc. (TER) reported Wednesday a profit for the third quarter that increased from last year, despite lower margins, reflecting double-digit revenue growth. Both adjusted earnings per share and quarterly revenues topped analysts' expectations. However, the company provided earnings and revenue guidance for the fourth quarter, below Street view.

"The continued strong build out of electronics test capacity, combined with our market share gains, has driven our semiconductor test orders and revenue up over 30% year-to-date when compared with the same period in 2013," President and CEO Mark Jagiela said in a statement.

The North Reading, Massachusetts-based company reported net income of $82.95 million or $0.38 per share for the third quarter, higher than $69.46 million or $0.29 per share in the prior-year quarter.

Results include acquired intangible asset amortization and discrete income tax adjustments.

Excluding items, adjusted net income for the quarter was $95.8 million or $0.44 per share, compared to $95.0 million or $0.46 per share in the year-ago quarter.

On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.40 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenue for the quarter increased 10 percent to $478.01 million from $433.38 million in the same quarter last year, and topped twelve Wall Street analysts' consensus estimate of $463.52 million.

Revenues included $380 million from semiconductor test, $55 million from wireless test and $43 million from system test.

Operating margin for the quarter contracted 110 basis points to 20.5 percent from a year ago, as gross margin declined 410 basis points.

Operating expenses for the quarter grew to $162.88 million from $160.79 million in the year-ago quarter.

Orders in the third quarter were $273 million of which $203 million were in Semiconductor Test, $42 million in Wireless Test, and $28 million in System Test.

"As we enter the seasonally slower fourth quarter period, we're encouraged by share gains at LitePoint in cellular and NFC test, broad adoption of new flash, System-on-a-Chip and production board test products, and improving results in analog test," Jagiela added.

Looking ahead to the fourth quarter, the company expects adjusted earnings in a range of $0.08 to $0.14 per share, on projected quarterly revenues between $305 million and $330 million.

Street is currently looking for earnings of $0.17 per share for the quarter, on revenues of $331.74 million.

The company added that its expects full-year 2014 earnings and revenues to both report double-digit growth. Street is currently looking for full-year 2014 earnings of $1.20 per share on annual revenue growth of 14.90% to $1.64 billion.

TER closed Wednesday's regular trading session at $17.38, down $0.45 or 2.52% on a volume of 3.85 million shares. The stock lost a further $0.38 or 2.19% in after-hours trading.