Teradyne (TER) Q3 Earnings Top Estimates, Revenues Fall Y/Y
Teradyne TER reported third-quarter 2022 earnings of $1.15 per share, above the midpoint of management’s guided range of 90 cents and $1.16 per share. Earnings surpassed the Zacks Consensus Estimate by 10.6%. However, the bottom line decreased 4.96% sequentially and 27.7% year over year.
Revenues of $827.1 million were above the midpoint of the guided range of $760-$840 million for the September quarter. Revenues surpassed the Zacks Consensus Estimate by 3.2%. The figure dipped 1.6% sequentially and 12.99% on a year-over-year basis.
The year-over-year decline was a result of declining Test and Industrial Automation revenues.
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Quarterly Details
Revenues from Semiconductor Test platforms, System Test business, Industrial Automation and Wireless Test business were $576 million (69.6% of total revenues), $116 million (14%), $89 million (10.8%) and $46 million (5.6%), respectively.
Test revenues and Industrial Automation revenues declined 14% and 2% from the respective prior-year quarter’s levels.
Operating Results
Non-GAAP gross margin was 58.7%, contracting 140 basis points (bps) year over year.
Operating expenses increased 2.1% year over year to $253.9 million. As a percentage of revenues, operating expenses increased 454 bps year over year to 30.7%.
Non-GAAP operating margin was 28.8%, which contracted 580 bps from the year-ago quarter’s reading.
Balance Sheet & Cash Flow
As of Oct 2, 2022, Teradyne’s cash and cash equivalents (including marketable securities) were $710.7 million, lower than $781.9 million on Jul 3, 2022.
Net cash provided by operating activities was $271.6 million for the third quarter compared with $115.5 million in the prior quarter.
Guidance
For the fourth quarter of 2022, Teradyne expects revenues between $670 million and $750 million. The Zacks Consensus Estimate for the same is pegged at $687.9 million.
Non-GAAP earnings are expected between 62 cents and 86 cents per share for fourth-quarter 2022. The consensus mark for the same is pegged at 72 cents per share.
Zacks Rank & Stocks to Consider
Currently, Teradyne carries a Zacks Rank #3 (Hold). TER has lost 51.3% in the year-to-date period.
Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Fortinet FTNT, The Trade Desk TTD and ZoomInfo Technologies ZI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fortinet is set to report third-quarter 2022 results on Nov 2. The Zacks Consensus Estimate for FTNT’s earnings is pegged at 27 cents per share, suggesting an increase of 35% from the prior-year period’s reported figure. FTNT has lost 22.2% in the year-to-date period. FTNT’s long-term earnings growth rate is currently projected at 18%.
The Trade Desk is scheduled to release third-quarter 2022 results on Nov 14. The Zacks Consensus Estimate for TTD’s earnings is pegged at 24 cents per share, suggesting an increase of 33.3% from the prior-year quarter’s reported figure. TTD has lost 36.9% in the year-to-date period. The Trade Desk’s long-term earnings growth rate is currently projected at 24%.
ZoomInfo Technologies is scheduled to release third-quarter 2022 results on Nov 1. The Zacks Consensus Estimate for ZI’s earnings is pegged at 20 cents per share, suggesting an increase of 53.9% from the prior-year quarter’s reported figure. ZI has lost 27.3% in the year-to-date period. ZI’s long-term earnings growth rate is currently projected at 34.7%.
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