Teradyne ( TER Quick Quote TER - Free Report) reported first-quarter 2023 non-GAAP earnings of 55 cents per share, which surpassed the Zacks Consensus Estimate by 30.9%. However, the bottom line decreased 43.9% year over year and 40.2% sequentially. Revenues of $617.5 million surpassed the Zacks Consensus Estimate of $591.7 million. The figure however declined 15.6% sequentially and 18.2% on a year-over-year basis. The year-over-year decline was a result of declining Test revenues. Further, supply-chain disruptions were headwinds. The company expects to witness sluggish demand in its Robotics business in the near term owing to slow industrial growth. Nevertheless, it expects an improvement in demand for automotive and industrial test equipment. Coming to price performance, TER has gained 3.8% against the industry’s fall of 2.4% in the year-to-date period. Revenue Details
Revenues from Semiconductor Test platforms, System Test business, Wireless Test business and Robotics were $415 million (67.2% of total revenues), $75 million (12.1%), $39 million (6.3%) and $89 million (14.4%), respectively.
Gross margin was 57.7%, contracting 250 basis points (bps) year over year.
Operating expenses decreased 2.1% year over year to $263.6 million. As a percentage of revenues, operating expenses expanded 710 bps year over year to 42.7%. The non-GAAP operating margin was 17.1%, which contracted significantly from 27.4% in the prior-year quarter. Balance Sheet & Cash Flow
As of Apr 2, 2023, Teradyne’s cash and cash equivalents (including marketable securities) were $742.1 million, lower than $894.4 million as of Dec 31, 2022.
Net cash provided by operating activities was $19.3 million for the first quarter compared with $183.4 million in the prior quarter. Guidance
For the second quarter of 2023, Teradyne expects revenues between $625 million and $685 million. The Zacks Consensus Estimate for the same is pegged at $608.4 million.
Non-GAAP earnings are expected between 55 cents and 74 cents per share for second-quarter 2023. The consensus mark for the stock is pegged at 49 cents per share. Zacks Rank & Stocks to Consider
Currently, Teradyne carries a Zacks Rank #3 (Hold).
Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Agilent Technologies ( A Quick Quote A - Free Report) , DigitalOcean ( DOCN Quick Quote DOCN - Free Report) and Arista Networks ( ANET Quick Quote ANET - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Agilent Technologies is set to report second-quarter fiscal 2023 results on May 23. The Zacks Consensus Estimate for A’s earnings is pegged at $1.27 per share, reflecting a growth of 12.4% from the year-ago quarter’s reported figure. A has lost 11.6% in the year-to-date period. DigitalOcean is scheduled to release first-quarter 2023 results on May 9. The Zacks Consensus Estimate for DOCN’s earnings is pegged at 29 cents per share, suggesting a jump from 7 cents per share reported in the prior-year quarter. DOCN has gained 25.5% in the year-to-date period. Arista Networks is scheduled to report first-quarter 2023 results on May 1. The Zacks Consensus Estimate for ANET’s earnings is pegged at $1.35 per share, suggesting an increase of 60.7% from the prior-year quarter’s reported figure. ANET has gained 26% in the year-to-date period.