Teradyne (TER) Surpasses Q4 Earnings & Revenue Estimates
Teradyne Inc. TER reported
fourth-quarter 2018 earnings of 63 cents per share, surpassing the
Zacks Consensus Estimate by 13 cents. The figure increased 37% year
over year.
Revenues of $519.6 million increased 8.4% year over year. Also, the
figure surpassed the Zacks Consensus Estimate of $496 million and
the guided range of $480 and $510 million.
Approximately 65.8% of the revenues came from semiconductor Testing
platforms, 16.2% from Industrial Automation, 10.4% from system Test
business and the remaining 7.7% from wireless Test business.
Inside the Headlines
The increase in total revenues was driven by escalating demand for
Semiconductor and Wireless test businesses.
Teradyne’s Semiconductor Test Group witnessed an increase in
revenues from record memory and analog devices, which helped offset
the weakness in mobility test shipments in 2018.
Industrial Automation segment witnessed 38% growth year over year
in 2018, but the growth was below the company’s expectation.
Notably, waning demand in China and the automotive sector
negatively impacted growth of this segment in 2018.
Teradyne, Inc. Price, Consensus and EPS Surprise
Teradyne, Inc. Price, Consensus and EPS Surprise | Teradyne, Inc. Quote
Margins
Pro-forma gross margin was 59.6%, up 310 basis points (bps) from
the prior-year quarter. The increase was due to cost reduction in
the manufacture of Universal Robots and favorable product
mix.
Total adjusted operating expenses of $197.3 million increased 11.9%
year over year. As a percentage of sales, selling &
administrative expenses increased from the year-ago quarter, while
engineering & development decreased. As a result,
adjusted operating margin came in at 25.8%, up 270 bps from the
year-ago quarter.
Balance Sheet
As of Dec 31, 2018, Teradyne’s cash and cash equivalents was $926.8
million, higher than $429.8 million as of Dec 31, 2017.
The company purchased $823 million of its common shares in 2018 and
expects to repurchase $500 million of its common shares in 2019.
Moreover, the company also declared a cash dividend of 9 cents per
share for its shareholders.
Q1 Guidance
Management expects first-quarter 2019 revenues in the band of $460
and $490 million. Non-GAAP earnings per share from continuing
operations are likely to be in the range of 39 and 47 cents.
The Zacks Consensus Estimate for first-quarter revenues and
earnings is pegged at $501.4 million and 50 cents,
respectively.
Zacks Rank & Stocks to
Consider
Teradyne currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader computer and technology
sector include SYNNEX Corporation SNX, Twitter, Inc. TWTR and
Cloudera, Inc. CLDR. All the three stocks sport a Zacks Rank #1
(Strong Buy). You can see the complete list of today’s
Zacks Rank #1 stocks here.
Expected long-term earnings growth rate for SYNNEX, Twitter and
Cloudera is 0.7%, 22.1% and 8%, respectively.
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