Teradyne Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Teradyne, Inc. (NYSE:TER) will unveil its latest earnings on Wednesday, July 25, 2012. Teradyne develops, designs, manufactures and sells automatic test systems and solutions used to test complex electronics.

Teradyne, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 58 cents per share, a rise of 16% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 37 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 58 cents during the last month. Analysts are projecting profit to rise by 31.7% compared to last year’s $1.83.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 2 cents, reporting net income of 30 cents per share against a mean estimate of profit of 28 cents per share.

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A Look Back: In the first quarter, profit fell 64.6% to $33.6 million (15 cents a share) from $94.9 million (41 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 5.2% to $396.7 million from $377.2 million.

Wall St. Revenue Expectations: On average, analysts predict $510.9 million in revenue this quarter, a rise of 24.4% from the year-ago quarter. Analysts are forecasting total revenue of $1.83 billion for the year, a rise of 28% from last year’s revenue of $1.43 billion.

Stock Price Performance: Between April 24, 2012 and July 19, 2012, the stock price fell $2.21 (-13.8%), from $16.03 to $13.82. The stock price saw one of its best stretches over the last year between December 28, 2011 and January 11, 2012, when shares rose for 10 straight days, increasing 14.1% (+$1.87) over that span. It saw one of its worst periods between May 1, 2012 and May 10, 2012 when shares fell for eight straight days, dropping 9.2% (-$1.59) over that span.

Key Stats:

On the top line, the company is looking to build on last quarter’s revenue increase, which snapped a string of revenue drops. Revenue fell 9.7% in the second quarter of the last fiscal year, 31.4% in the third quarter of the last fiscal year and 7.8% in the fourth quarter of the last fiscal year before climbing in the first quarter.

The company is hoping to rebound with this earnings release after a net income drop last quarter. Net income rose more than twofold in the fourth quarter of the last fiscal year before dropping in the first quarter.

Analyst Ratings: There are seven out of 11 analysts surveyed (63.6%) rating Teradyne a buy.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.98 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company improved this liquidity measure from 2.94 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in current assets. Current assets increased 1.9% to $1.12 billion while liabilities rose by 0.6% to $375.8 million.

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

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