Teradyne Inc. (TER - Free Report) reported second-quarter 2018 earnings of 59 cents per share, surpassing the Zacks Consensus Estimate by 10 cents. Earnings increased 32% sequentially but decreased 35% year over year.
Given the popularity of its products, strength in Universal Robots and continuous design wins, we are optimistic about Teradyne’s performance in the long run.
Following second-quarter results, the share price was up almost 9% in after-hours trading. Also, on a 12-month basis, the stock has outperformed the industry it belongs to. It has returned 11.7% compared with the industry’s rally of 10.1% in the same time frame.
Revenues
Revenues of $526.9 million increased 14.9% sequentially but decreased 24.4% year over year. Also, the figure surpassed the Zacks Consensus Estimate of $507 million and came in within management’s guided range of $490-$520 million.
Approximately 68% of the revenues came from semiconductor Testing platforms, 12% from Industrial Automation, 13% from system Test business and the remaining 7% from wireless Test business.
During the quarter, sales from Memory Test were up 34% from the year-ago quarter to $67 million, while the same from Universal Robots were up 45% year over year to $57 million.
Margins
According to the press release, pro-forma gross margin was 58.4%, up 310 basis points (bps) sequentially and 240 bps from the prior-year quarter. The increase was due to a favorable mix.
Total adjusted operating expenses of $174.8 million increased 1.4% year over year. Both selling & administrative and engineering & development expenses, as a percentage of sales, increased from a year ago. As a result, adjusted operating margin came in at 25.2%, up 370 bps sequentially but down 610 bps from the year-ago quarter.
Balance Sheet
Teradyne ended the second quarter with Trade receivables of $454.1 million, up from $414 million recorded in the last quarter.
Cash flow from operations was $130.2 million compared with ($81.9) million in the last reported quarter. Capex was $27.9 million compared with $34.8 million in the first quarter.
Share Repurchase/Dividend
In the reported quarter, Teradyne spent $226.5 million on share repurchases and paid $17.1 million as dividend.
Q3 Guidance
Management expects third-quarter revenues in the band of $540-$570 million, increasing 5.3% sequentially at the midpoint of the guided range. The Zacks Consensus Estimate is pegged at $518.2 million.
Non-GAAP earnings per share from continuing operations are likely to be in the range of 59-66 cents. The Zacks Consensus Estimate is pegged at 53 cents. GAAP earnings are expected within 51-59 cents.
Zacks Rank &Stocks to Consider
Currently, Teradyne carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Groupon (GRPN - Free Report) , IAC/InterActiveCorp (IAC - Free Report) and Facebook . While Groupon and IAC/InterActiveCorp sport a Zacks Rank #1 (Strong Buy), Facebook holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Groupon, IAC/InterActiveCorp and Facebook is currently projected to be 3%, 7.5% and 24.4%, respectively.
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Teradyne Inc. (TER - Free Report) reported second-quarter 2018 earnings of 59 cents per share, surpassing the Zacks Consensus Estimate by 10 cents. Earnings increased 32% sequentially but decreased 35% year over year.
Given the popularity of its products, strength in Universal Robots and continuous design wins, we are optimistic about Teradyne’s performance in the long run.
Following second-quarter results, the share price was up almost 9% in after-hours trading. Also, on a 12-month basis, the stock has outperformed the industry it belongs to. It has returned 11.7% compared with the industry’s rally of 10.1% in the same time frame.
Revenues
Revenues of $526.9 million increased 14.9% sequentially but decreased 24.4% year over year. Also, the figure surpassed the Zacks Consensus Estimate of $507 million and came in within management’s guided range of $490-$520 million.
Approximately 68% of the revenues came from semiconductor Testing platforms, 12% from Industrial Automation, 13% from system Test business and the remaining 7% from wireless Test business.
During the quarter, sales from Memory Test were up 34% from the year-ago quarter to $67 million, while the same from Universal Robots were up 45% year over year to $57 million.
Margins
According to the press release, pro-forma gross margin was 58.4%, up 310 basis points (bps) sequentially and 240 bps from the prior-year quarter. The increase was due to a favorable mix.
Total adjusted operating expenses of $174.8 million increased 1.4% year over year. Both selling & administrative and engineering & development expenses, as a percentage of sales, increased from a year ago. As a result, adjusted operating margin came in at 25.2%, up 370 bps sequentially but down 610 bps from the year-ago quarter.
Balance Sheet
Teradyne ended the second quarter with Trade receivables of $454.1 million, up from $414 million recorded in the last quarter.
Cash flow from operations was $130.2 million compared with ($81.9) million in the last reported quarter. Capex was $27.9 million compared with $34.8 million in the first quarter.
Share Repurchase/Dividend
In the reported quarter, Teradyne spent $226.5 million on share repurchases and paid $17.1 million as dividend.
Q3 Guidance
Management expects third-quarter revenues in the band of $540-$570 million, increasing 5.3% sequentially at the midpoint of the guided range. The Zacks Consensus Estimate is pegged at $518.2 million.
Non-GAAP earnings per share from continuing operations are likely to be in the range of 59-66 cents. The Zacks Consensus Estimate is pegged at 53 cents. GAAP earnings are expected within 51-59 cents.
Zacks Rank &Stocks to Consider
Currently, Teradyne carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Groupon (GRPN - Free Report) , IAC/InterActiveCorp (IAC - Free Report) and Facebook . While Groupon and IAC/InterActiveCorp sport a Zacks Rank #1 (Strong Buy), Facebook holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Groupon, IAC/InterActiveCorp and Facebook is currently projected to be 3%, 7.5% and 24.4%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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