Advertisement
Singapore markets close in 7 hours 32 minutes

  • Straits Times Index

    3,194.28
    +6.62 (+0.21%)
     

  • Nikkei

    37,197.03
    -882.67 (-2.32%)
     

  • Hang Seng

    16,385.87
    0.00 (0.00%)
     

  • FTSE 100

    7,877.05
    +29.06 (+0.37%)
     

  • Bitcoin USD

    62,015.33
    +405.34 (+0.66%)
     

  • CMC Crypto 200

    1,291.76
    +406.22 (+45.80%)
     

  • S&P 500

    5,011.12
    -11.09 (-0.22%)
     

  • Dow

    37,775.38
    +22.07 (+0.06%)
     

  • Nasdaq

    15,601.50
    -81.87 (-0.52%)
     

  • Gold

    2,403.30
    +5.30 (+0.22%)
     

  • Crude Oil

    84.50
    +1.77 (+2.14%)
     

  • 10-Yr Bond

    4.6470
    +0.0620 (+1.35%)
     

  • FTSE Bursa Malaysia

    1,550.25
    +5.49 (+0.36%)
     

  • Jakarta Composite Index

    7,166.81
    -7,130.84 (-49.87%)
     

  • PSE Index

    6,523.19
    +73.15 (+1.13%)
     

Teradyne (TER) Q3 Earnings & Revenues Surpass Estimates

Zacks Equity Research
·4-min read

Teradyne Inc. TER reported third-quarter 2020 earnings of $1.18 per share, which surpassed the Zacks Consensus Estimate of $1.11. The figure increased 53.2% year over year but decreased 11.3% sequentially.

Revenues of $819.5 million increased 40.8% year over year. The figure also surpassed the Zacks Consensus Estimate by 4.3%.

Following strong third-quarter results and encouraging fourth-quarter guidance, its share price rose 1.5%.

Inside the Headlines

Approximately 72% of revenues came from semiconductor testing platforms, 15% from the System Test business, 8% from Industrial Automation and the remaining 5% from the Wireless Test business.

The increase in total revenues was driven by strong test revenues, which grew 46% year over year on Memory and Storage test shipments. Also, stronger-than-expected System on a Chip test shipments — driven by increased demand for mobility-related test capacity — aided revenue growth.

Teradyne’s Industrial Automation revenues were up 17% sequentially but flat with the year-ago quarter on improving global manufacturing conditions and new products.

Teradyne, Inc. Price, Consensus and EPS Surprise

Teradyne, Inc. price-consensus-eps-surprise-chart | Teradyne, Inc. Quote

Margins

Pro-forma gross margin was 56%, down 330 basis points (bps) from the prior-year quarter. The decrease was due to an unfavorable product mix.

Total operating expenses (selling and administrative & engineering and development) of $210.7 million increased 12.7% year over year. As a percentage of sales, both selling & administrative expenses and engineering & development costs decreased from the year-ago quarter.

Operating margin came in at 30.3%, up 280 bps from the year-ago quarter.

Balance Sheet

At third quarter-end, Teradyne’s cash and cash equivalents (including marketable securities) were $1.23 billion, higher than $958.1 million in the prior quarter.

Net cash provided by operating activities was $342.5 million for the third quarter versus $225.8 million in the prior quarter.

During the quarter, the company paid $16.6 million as dividends.

Guidance

Management expects fourth-quarter 2020 revenues in the band of $680-$740 million. Non-GAAP earnings per share from continuing operations are likely to be in the range of $0.90-$1.06.

Management provided encouraging fourth-quarter guidance, reflecting strength in the company’s test businesses.

The Zacks Consensus Estimate for fourth-quarter revenues and earnings per share is pegged at $516.50 million and 45 cents, respectively.

For full-year 2020, management expects sales to grow more than 33% on a year-over-year basis to $3.0 billion. GAAP earnings per share are expected to be $4.12, indicating 58% year-over-year growth and non-GAAP earnings are projected at $4.50, suggesting 57% improvement from a year ago.

The Zacks Consensus Estimate for full-year revenues and earnings per share is pegged at $2.85 million and $3.87, respectively.

Zacks Rank and Other Key Picks

Currently, Teradyne carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader technology sector include AMETEK, Inc. AME, Intuit Inc. INTU and Alibaba Group Holding Limited BABA, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for AMETEK, Intuit, and Alibaba is currently projected at 7.2%, 14.5% and 18.9%, respectively.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
AMETEK, Inc. (AME) : Free Stock Analysis Report
 
Intuit Inc. (INTU) : Free Stock Analysis Report
 
Teradyne, Inc. (TER) : Free Stock Analysis Report
 
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research