Teradyne Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Teradyne, Inc. (NYSE:TER) will unveil its latest earnings on Wednesday, October 24, 2012. Teradyne develops, designs, manufactures and sells automatic test systems and solutions used to test complex electronics.

Teradyne, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 46 cents per share, a rise of 35.3% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 55 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 46 cents during the last month. For the year, analysts are projecting net income of $1.77 per share, a rise of 27.3% from last year.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 19 cents, reporting profit of 77 cents per share against a mean estimate of net income of 58 cents per share.

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Wall St. Revenue Expectations: On average, analysts predict $439.5 million in revenue this quarter, a rise of 27.6% from the year-ago quarter. Analysts are forecasting total revenue of $1.73 billion for the year, a rise of 21% from last year’s revenue of $1.43 billion.

A Look Back: In the second quarter, profit rose 25.1% to $111.4 million (49 cents a share) from $89.1 million (39 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 33.6% to $548.3 million from $410.5 million.

Stock Price Performance: Between August 22, 2012 and October 18, 2012, the stock price had fallen $1.45 (-9.2%), from $15.70 to $14.25. The stock price saw one of its best stretches over the last year between December 28, 2011 and January 11, 2012, when shares rose for 10 straight days, increasing 14.1% (+$1.87) over that span. It saw one of its worst periods between September 14, 2012 and September 26, 2012 when shares fell for nine straight days, dropping 14.5% (-$2.38) over that span.

Key Stats:

On the top line, the company is looking to build on two-straight revenue increases with this earnings announcement. Revenue rose 5.2% in the first quarter before climbing again in the second quarter.

There has enjoyed solid performance recently heading into this earnings announcement with profit rising by a year-over-year average of 5.6% for the last four quarters.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.09 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company improved this liquidity measure from 2.98 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 17.5% to $1.32 billion while liabilities rose by 13.3% to $425.9 million.

Analyst Ratings: There are eight out of 12 analysts surveyed (66.7%) rating Teradyne a buy.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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