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Teradyne (TER) to Report Q2 Earnings: What's in the Cards?

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Teradyne (TER - Free Report) is scheduled to report second-quarter 2021 results on Jul 27.

For the second quarter, the company expects revenues between $1.01 billion and $1.09 billion. The Zacks Consensus Estimate for sales is pegged at $1.05 billion, indicating an improvement of 25.6% from the year-ago reported value.

Further, it anticipates non-GAAP earnings between $1.62 and $1.83 per share for second-quarter 2021. The consensus mark for earnings per share is pegged at $1.74, indicating a 30.8% rise from the previous-year reported figure.

It surpassed the Zacks Consensus Estimate in all the trailing four quarters, with the average earnings surprise being 13.01%.

Teradyne, Inc. Price and EPS Surprise

Teradyne, Inc. Price and EPS Surprise

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

Key Factors to Note

The company’s solid momentum across the Test business is likely to get reflected in second-quarter results.

Rising attach rate of electronics, growing complexity of devices and faster refresh rates for many of the complex devices are expected to have driven growth of the Semiconductor Test business in the quarter to be reported.

Teradyne’s positive outlook for sales and profits in both system on-a-chip (SOC) and memory test markets should have been a tailwind for semiconductor test revenues.

Further, growing proliferation of high performance processors for end applications might have boosted the demand for compute portion of the SOC Test in the second quarter. This in turn is likely to have benefited the company’s performance in the memory and SLT markets.

Furthermore, strengthening momentum across the UltraFLEXplus platform is expected to have driven Teradyne’s growth in the SOC Test market.

In addition, strengthening Eagle shipments are likely to have driven growth within the company’s auto industrial segment in the to-be-reported quarter.

It has been witnessing strong demand in both flash and DRAM in the Memory test business. This is likely to be reflected on the to-be-reported quarter’s results.

Further, the global economic recovery might have been a major positive for Teradyne’s Industrial Automation business.

Also, solid adoption of UR and MiR products across various applications is likely to have benefited the Industrial Automation business.

However, the company has been experiencing shipment delays in automotive and industrial test markets due to a challenging supply environment. This is expected to get reflected in the upcoming results.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Teradyne this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Teradyne has an Earnings ESP of 0.00% and a Zacks Rank #3, at present.

Stocks to Consider

Here are some stocks that you may consider as our model shows that these have the right combination of elements to beat on earnings this season.

Arch Capital Group (ACGL - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank of 3, at present.

Albertsons Companies (ACI - Free Report) has an Earnings ESP of +9.90% and a Zacks Rank of 2, at present.

Alliance Data Systems Corporation (ADS - Free Report) has an Earnings ESP of +3.68% and a Zacks Rank of 3, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.