Teradyne Q1 Results Top Estimates, Guides Q2 EPS Below View

(RTTNews) - Automated test-equipment maker Teradyne, Inc. (TER) reported Wednesday a profit for the first quarter that plunged from last year, despite revenue growth, reflecting lower margins and lower income tax benefit. Both adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also provided earnings guidance for the second quarter, below Street view.

The North Reading, Massachusetts-based company reported net income of $0.93 million or breakeven per share for the first quarter, lower than $6.59 million or $0.03 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $22.4 million or $0.11 per share, compared to $18.2 million or $0.09 per share in the year-ago quarter.

On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.07 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenue for the quarter increased 14 percent to $321.01 million from $280.37 million in the same quarter last year, and topped fourteen Wall Street analysts' consensus estimate of $314.57 million.

"First quarter Semiconductor Test orders were the highest in nearly four years driving a 55% increase in overall company orders. UltraFLEX and J750 products recorded strong demand for applications processor and microcontroller test driven primarily by mobile end markets," President and CEO Mark Jagiela said in a statement.

Bookings in the first quarter were $450 million of which $366 million were in semiconductor test, $57 million in the wireless test and $27 million in systems test.

Operating margin for the quarter contracted 40 basis points to 1.2 percent from a year ago, and gross profit margin declined 270 basis points to 52.0 percent from last year.

Operating expenses for the quarter grew to $163.36 million from $149.01 million in the year-ago quarter. Income tax benefit for the quarter was $2.80 million, compared to $8.02 million last year.

The company also initiated a quarterly cash dividend of $0.06 per share, payable on June 2 to shareholders of record as of the close of business on May 9, 2014.

Looking ahead to the second quarter, the company expects adjusted earnings in a range of $0.36 to $0.43 per share on projected quarterly revenues between $460 million and $490 million.

Street is currently looking for earnings of $0.49 per share for the second quarter, on revenues of $475.13 million.

"Our flexible manufacturing capability is designed to respond to this type of order surge and we are ramping second quarter production to meet the increasing demand. Meanwhile, although Wireless Test orders more than tripled from the Q4 trough, near term visibility remains limited with a more cautious outlook from customers," Jagiela stated.

TER closed Wednesday's regular trading session at $19.18, down $0.20 or 1.03% on a volume of 1.94 million shares.