We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Teradyne (TER) Down 2.8% Since Earnings Report: Can It Rebound?
Read MoreHide Full Article
It has been about a month since the last earnings report for Teradyne, Inc. (TER - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Teradyne Beats Earnings and Revenue Estimates in Q1
Teradyne reported first-quarter 2017 earnings of 44 cents per share, surpassing the Zacks Consensus Estimate of 38 cents. Also, earnings were up 41.9% year over year. Adjusted earnings per share exclude one-time items but include stock-based compensation expense.
Following the first-quarter results, the share price surged 11.05%. The increase was driven by strong first-quarter guidance and better-than-expected second-quarter guidance.
In the last one year, shares of Teradyne outperformed the Zacks categorized Electronic Testing Equipment industry. While the industry gained 43.4%, the stock returned 60.9%.
Revenues
Revenues of $457 million increased 20.2% sequentially and 6% year over year. However, the figure came above the Zacks Consensus Estimate of $439.2 million and management’s guided range of $420–$450 million.
Approximately 78% of revenues came from semiconductor testing platforms, 9% from system test business, 5% from wireless test, and the remaining 8% from Industrial Automation.
Bookings
Total orders amounted to $595 million, down 5.3% sequentially but up 53% year over year. On a sequential basis, Wireless Test Group orders were up 17.4% to $27 million and Industrial Automation orders were up 32.4% to $45 million.
However, Systems Test orders decreased 2.1% to $46 million and Semiconductor Test orders decreased 9.2% to $476 million. Nevertheless, Semiconductor Test orders were up 56% year over year, driven by strength in its end markets, namely mobile, automotive, industrial analog, and Flash memory.
Margins
Pro forma gross margin was 58%, up 56 basis points (bps) sequentially and 463 bps year over year. The increase was due to higher revenues and a favorable mix.
Total adjusted operating expenses of $161.1 million increased 8.6% sequentially and 5.5% year over year. As a percentage of sales, engineering & development expenses decreased, while selling & administrative expenses increased. As a result, adjusted operating margin came in at 22.7%, up 435 bps sequentially and 480 bps year over year.
GAAP net income was $85.2 million in the first quarter against net income of $50 million in the year-ago quarter. Excluding special items but including stock-based compensation expense, non-GAAP net income came in at $88.7 million or 44 cents per share compared with $64.4 million or 31 cents in the year-ago quarter.
Balance Sheet
Teradyne ended the quarter with cash and cash equivalents and marketable securities balance of $1.22 billion, up from $1.18 billion in the prior quarter. Trade receivables were $315 million, up from $192.4 million last quarter.
Cash flow from operations was ($61.1) million compared with $36.4 million in the previous quarter. Capex was $22.1 million compared with $19.0 million in the fourth quarter.
Share Repurchase/Dividend
In the reported quarter, Teradyne spent $37.7 million on share repurchases and paid $14 million as dividend.
Q2 Guidance
Management expects second-quarter revenues in the $660–$700 million range, up 48.7% sequentially at the mid-point.
Non-GAAP earnings per share from continuing operations are likely to be in the range of 81–90 cents. GAAP earnings are expected in the range of 77–86 cents.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one upward revision for the current quarter.
At this time, Teradyne's stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with a 'D'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable soley for growth investors based on our styles scores.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. It comes with little surprise that the stock has a Zacks Rank #1 (Strong Buy). We are expecting an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Teradyne (TER) Down 2.8% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Teradyne, Inc. (TER - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Teradyne Beats Earnings and Revenue Estimates in Q1
Teradyne reported first-quarter 2017 earnings of 44 cents per share, surpassing the Zacks Consensus Estimate of 38 cents. Also, earnings were up 41.9% year over year. Adjusted earnings per share exclude one-time items but include stock-based compensation expense.
Following the first-quarter results, the share price surged 11.05%. The increase was driven by strong first-quarter guidance and better-than-expected second-quarter guidance.
In the last one year, shares of Teradyne outperformed the Zacks categorized Electronic Testing Equipment industry. While the industry gained 43.4%, the stock returned 60.9%.
Revenues
Revenues of $457 million increased 20.2% sequentially and 6% year over year. However, the figure came above the Zacks Consensus Estimate of $439.2 million and management’s guided range of $420–$450 million.
Approximately 78% of revenues came from semiconductor testing platforms, 9% from system test business, 5% from wireless test, and the remaining 8% from Industrial Automation.
Bookings
Total orders amounted to $595 million, down 5.3% sequentially but up 53% year over year. On a sequential basis, Wireless Test Group orders were up 17.4% to $27 million and Industrial Automation orders were up 32.4% to $45 million.
However, Systems Test orders decreased 2.1% to $46 million and Semiconductor Test orders decreased 9.2% to $476 million. Nevertheless, Semiconductor Test orders were up 56% year over year, driven by strength in its end markets, namely mobile, automotive, industrial analog, and Flash memory.
Margins
Pro forma gross margin was 58%, up 56 basis points (bps) sequentially and 463 bps year over year. The increase was due to higher revenues and a favorable mix.
Total adjusted operating expenses of $161.1 million increased 8.6% sequentially and 5.5% year over year. As a percentage of sales, engineering & development expenses decreased, while selling & administrative expenses increased. As a result, adjusted operating margin came in at 22.7%, up 435 bps sequentially and 480 bps year over year.
GAAP net income was $85.2 million in the first quarter against net income of $50 million in the year-ago quarter. Excluding special items but including stock-based compensation expense, non-GAAP net income came in at $88.7 million or 44 cents per share compared with $64.4 million or 31 cents in the year-ago quarter.
Balance Sheet
Teradyne ended the quarter with cash and cash equivalents and marketable securities balance of $1.22 billion, up from $1.18 billion in the prior quarter. Trade receivables were $315 million, up from $192.4 million last quarter.
Cash flow from operations was ($61.1) million compared with $36.4 million in the previous quarter. Capex was $22.1 million compared with $19.0 million in the fourth quarter.
Share Repurchase/Dividend
In the reported quarter, Teradyne spent $37.7 million on share repurchases and paid $14 million as dividend.
Q2 Guidance
Management expects second-quarter revenues in the $660–$700 million range, up 48.7% sequentially at the mid-point.
Non-GAAP earnings per share from continuing operations are likely to be in the range of 81–90 cents. GAAP earnings are expected in the range of 77–86 cents.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one upward revision for the current quarter.
Teradyne, Inc. Price and Consensus
Teradyne, Inc. Price and Consensus | Teradyne, Inc. Quote
VGM Scores
At this time, Teradyne's stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with a 'D'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable soley for growth investors based on our styles scores.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. It comes with little surprise that the stock has a Zacks Rank #1 (Strong Buy). We are expecting an above average return from the stock in the next few months.