Teradyne Inc. Earnings: Tops Analysts’ Expectations

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S&P 500 (NYSE:SPY) component Teradyne Inc. (NYSE:TER) reported net income above Wall Street’s expectations for the fourth quarter. Teradyne develops, designs, manufactures and sells automatic test systems and solutions used to test complex electronics.

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Teradyne Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the semiconductor equipment and materials company rose to $125.1 million (56 cents per share) vs. $60.1 million (27 cents per share) in the same quarter a year earlier. This is a more than twofold rise from the year earlier quarter.

Revenue: Fell 4.2% to $297 million from the year earlier quarter.

Actual vs. Wall St. Expectations: TER reported adjusted net income of 16 cents per share. By that measure, the company beat the mean estimate of 11 cents per share. It beat the average revenue estimate of $284.8 million.

Quoting Management: “We saw an upturn in customer orders in our System-on-a-Chip (SOC) business and in all lines of our Systems Test Group in the fourth quarter,” said Mike Bradley, President and CEO. “The new order increase was driven by very strong demand for leading-edge semiconductor testers for new mobile products and by a broadened storage test customer base. As a result, we’re increasing our first quarter revenue guidance. We closed 2011 with very solid operating results in both Semiconductor Test and Systems Test and we added an exciting growth engine late in the year with the acquisition of LitePoint.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 11 cents in the third quarter, by 9 cents in the second quarter, and by 3 cents in the first quarter.

Last quarter’s profit increase breaks a streak of two consecutive quarters of year-over-year profit decreases. In the third quarter, net income fell 62.8% while the figure dropped in the second quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from 20 cents a share to 17 cents over the last ninety days. For the fiscal year, the average estimate has moved up from $1.26 a share to $1.33 over the last ninety days.

Competitors to Watch: LTX-Credence Corporation (NASDAQ:LTXC), Verigy Ltd. (NASDAQ:VRGY), Advantest Corp. (NYSE:ATE), Aehr Test Systems (NASDAQ:AEHR), Nanometrics Incorporated (NASDAQ:NANO), Agilent Technologies Inc. (NYSE:A), Aetrium, Inc. (NASDAQ:ATRM), Cohu, Inc. (NASDAQ:COHU), Rudolph Technologies, Inc. (NASDAQ:RTEC), and inTEST Corporation (NASDAQ:INTT).

Investing Insights: Will the iPad 3 Be the Next Catalyst for Apple’s Stock?

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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