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Teradyne Posts Upside Surprise

The company's shares jump in early trading after its results beat Wall Street's expectation.
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(TER) - Get Free Report

shares jumped in early trading after the company posted third-quarter results that easily beat Wall Street estimates and offered a bright earnings outlook for the fourth quarter.

The maker of automatic-test equipment and interconnection systems reported a third-quarter loss of $35.4 million, or 18 cents a share, including charges relating to restructuring and inventory. Excluding the charges, Teradyne earned $17.4 million, or 9 cents a share -- surpassing analysts' mean estimate for a loss of 1 cent a share.

In last year's third quarter, Boston-based Teradyne earned $41.1 million, or 21 cents a shares.

Teradyne's revenue fell to $386.7 million from $457.8 million a year earlier, but beat the company's July forecast for revenue of $350 million to $370 million. The company said it had 40% sequential growth in orders for semiconductor test equipment, and projected strong growth for the fourth quarter from its semiconductor, assembly and broadband test systems.

The company sees fourth-quarter earnings from continuing operations of 16 cents to 21 cents a share, before items. Analysts polled by Thomson First Call have a mean estimate for earnings of 6 cents a share.

Teradyne's forecast excludes a tax benefit and gain on the sale of the building. The tax benefit relates to the company's plan, announced last week, to sell its connection systems business for $390 million. Including items, the company sees fourth-quarter earnings from continuing operations of 42 cents to 45 cents a share, and net income of 96 cents to $1.01 a share.

Teradyne expects fourth-quarter sales of $330 million to $350 million. Analysts, on average, see third-quarter sales of $383.3 million.

Teradyne shares rose 5.2%, or 72 cents, in early trading to $14.65.