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Teradyne (TER) Q2 Earnings & Revenues Top Estimates, Fall Y/Y
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Teradyne (TER - Free Report) reported second-quarter 2023 earnings of 79 cents per share, which surpassed the Zacks Consensus Estimate by 19.7%. However, the bottom line decreased by 34.7% year over year.
Revenues of $684.44 million surpassed the Zacks Consensus Estimate of $657.03 million. The figure dipped 19% on a year-over-year basis due to softness in robotics demand.
Nevertheless, the company witnessed growing semiconductor test shipments during the reported quarter.
Solid test demand for DRR5 and HBM memory devices for data center applications, as well as strengthening system-on-chip demand for automotive applications, remain positives. These factors are expected to aid the company’s performance in the days ahead.
On a year-to-date basis, Teradyne has gained 31.6%, outperforming the industry’s growth of 10.4%.
However, macroeconomic headwinds and sluggishness in industrial activities are expected to hurt order rates in the robotics business in the third quarter.
Revenues from Semiconductor Test platforms, System Test business, Wireless Test business and Robotics were $475 million (69.4% of total revenues), $94 million (13.7%), $44 million (6.4%) and $72 million (10.5%), respectively.
Operating Results
Gross margin was 58.8%, contracting 140 basis points (bps) year over year.
Operating expenses increased 1.6% year over year to $262.6 million. As a percentage of revenues, operating expenses expanded by 770 bps year over year to 38.4%.
Non-GAAP operating margin was 22.1%, which contracted 820 bps from the year-ago quarter’s reading.
Balance Sheet & Cash Flow
As of Jul 2, 2023, Teradyne’s cash and cash equivalents (including marketable securities) were $708.4 million, lower than $742.1 million as of Apr 2, 2023.
Net cash provided by operating activities was $142.8 million for the second quarter, up from $19.3 million in the prior quarter.
The company returned $152 million to shareholders in the form of share repurchases and dividends in the reported quarter.
Guidance
For the third quarter of 2023, Teradyne expects revenues between $650 million and $710 million, whose mid-point is above the Zacks Consensus Estimate of $673.6 million.
Non-GAAP earnings are expected between 61 cents and 81 cents per share for third-quarter 2023. The mid-point of the range is below the consensus mark of 73 cents per share.
Zacks Rank & Stocks to Consider
Currently, Teradyne carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector are Salesforce (CRM - Free Report) , Akamai Technologies (AKAM - Free Report) and AvidXchange (AVDX - Free Report) . Salesforce sports a Zacks Rank #1 (Strong Buy) and Akamai Technologies and AvidXchange each carry a Zacks Rank #2 (Buy).
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Teradyne (TER) Q2 Earnings & Revenues Top Estimates, Fall Y/Y
Teradyne (TER - Free Report) reported second-quarter 2023 earnings of 79 cents per share, which surpassed the Zacks Consensus Estimate by 19.7%. However, the bottom line decreased by 34.7% year over year.
Revenues of $684.44 million surpassed the Zacks Consensus Estimate of $657.03 million. The figure dipped 19% on a year-over-year basis due to softness in robotics demand.
Nevertheless, the company witnessed growing semiconductor test shipments during the reported quarter.
Solid test demand for DRR5 and HBM memory devices for data center applications, as well as strengthening system-on-chip demand for automotive applications, remain positives. These factors are expected to aid the company’s performance in the days ahead.
On a year-to-date basis, Teradyne has gained 31.6%, outperforming the industry’s growth of 10.4%.
However, macroeconomic headwinds and sluggishness in industrial activities are expected to hurt order rates in the robotics business in the third quarter.
Teradyne, Inc. Price, Consensus and EPS Surprise
Teradyne, Inc. price-consensus-eps-surprise-chart | Teradyne, Inc. Quote
Revenue Details
Revenues from Semiconductor Test platforms, System Test business, Wireless Test business and Robotics were $475 million (69.4% of total revenues), $94 million (13.7%), $44 million (6.4%) and $72 million (10.5%), respectively.
Operating Results
Gross margin was 58.8%, contracting 140 basis points (bps) year over year.
Operating expenses increased 1.6% year over year to $262.6 million. As a percentage of revenues, operating expenses expanded by 770 bps year over year to 38.4%.
Non-GAAP operating margin was 22.1%, which contracted 820 bps from the year-ago quarter’s reading.
Balance Sheet & Cash Flow
As of Jul 2, 2023, Teradyne’s cash and cash equivalents (including marketable securities) were $708.4 million, lower than $742.1 million as of Apr 2, 2023.
Net cash provided by operating activities was $142.8 million for the second quarter, up from $19.3 million in the prior quarter.
The company returned $152 million to shareholders in the form of share repurchases and dividends in the reported quarter.
Guidance
For the third quarter of 2023, Teradyne expects revenues between $650 million and $710 million, whose mid-point is above the Zacks Consensus Estimate of $673.6 million.
Non-GAAP earnings are expected between 61 cents and 81 cents per share for third-quarter 2023. The mid-point of the range is below the consensus mark of 73 cents per share.
Zacks Rank & Stocks to Consider
Currently, Teradyne carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector are Salesforce (CRM - Free Report) , Akamai Technologies (AKAM - Free Report) and AvidXchange (AVDX - Free Report) . Salesforce sports a Zacks Rank #1 (Strong Buy) and Akamai Technologies and AvidXchange each carry a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Salesforce shares have gained 70.7% in the year-to-date period. The long-term earnings growth rate for CRM is currently projected at 19.25%.
Akamai shares have gained 9.5% in the year-to-date period. The long-term earnings growth rate for AKAM is currently projected at 10%.
AvidXchange shares have increased 21.1% in the year-to-date period. The long-term earnings growth rate for AVDX is currently projected at 22.90%.