Teradyne Q2 Profit Down 40%, But Results Beat View; Issues Weak Q3 Outlook

(RTTNews) - Teradyne Inc. (TER), a provider of automated test equipment, on Wednesday reported a 40 percent decline in profit for the second quarter on lower revenues, and forecast results for the third quarter below analysts' expectations. The company's shares tumbled almost 7 percent in extended trades. However, both revenue and adjusted earnings for the second quarter beat analysts' estimates.

The company's second-quarter net income was $66.56 million or $0.28 per share, down from $111.39 million or $0.49 per share in the same period last year.

Excluding acquired intangible asset amortization and non-cash convertible debt interest, adjusted earnings for the quarter were $89.1 million or $0.43 per share, compared to $156.3 million or $0.77 per share in the year-ago period. On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.32 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter declined 22 percent to $428.89 million from $548.28 million in the same period last year. Analysts had a consensus revenue estimate for the quarter of $407.85 million.

Gross margin for the quarter was 56.2 percent, compared to 56.4 percent in the prior-year period.

Bookings in the quarter were $474 million, down 20 percent from the same period last year. The quarter's bookings include $362 million in Semiconductor Test, $87 million in Wireless Test, and $25 million in Systems Test group.

The company noted that Semiconductor Test orders grew 40 percent in the quarter, driven by the mobile, power management, microcontroller, and memory test sectors. Meanwhile, Wireless and Systems Test orders declined in the quarter as customers adjusted their capacity to market demand.

Looking ahead to the third quarter, Teradyne forecast earnings in a range of $0.23 to $0.31 per share, adjusted earnings between $0.39 and $0.49 per share, and revenues of $425 million to $465 million.

Analysts expect the company to earn $0.60 per share for the quarter on revenues of $522.80 million.

TER closed Wednesday's trading at $17.29, down $0.42 or 2.37 percent on a volume of 2.75 million shares. In after-hours, the stock further declined $1.14 or 6.59 percent to $16.15.