Australia Markets open in 31 mins

What's in Store for Teradyne (TER) This Earnings Season?

Zacks Equity Research

Teradyne Inc. TER is slated to report third-quarter 2019 results on Oct 22. In the last reported quarter, the company delivered a positive earnings surprise of 6.45%.

Notably, it outperformed the Zacks Consensus Estimate in all the trailing four quarters, with the average being 16.97%.

Performance in the Last Reported Quarter

Teradyne had reported second-quarter 2019 non-GAAP earnings of 66 cents per share, which surpassed the Zacks Consensus Estimate by 4 cents and increased 11.9% from the year-ago period.

Revenues of $564 million outpaced the Zacks Consensus Estimate of $538 million and improved 7% on a year-over-year basis.

Let’s see how things are shaping up for this announcement.

Teradyne, Inc. Price and EPS Surprise

Teradyne, Inc. Price and EPS Surprise

Teradyne, Inc. price-eps-surprise | Teradyne, Inc. Quote

Factors to Consider

The popularity of its products, acquisitions of LitePoint and Universal Robots, and continued design wins are expected to have driven Teradyne’s performance in the to-be-reported quarter. However, weakness in a few end markets served by the company could have been a headwind during the quarter.

Semiconductor Test revenues are likely to have got a boost in third-quarter 2019 owing to continued growth in 5G infrastructure, and strong networking and memory test spending. The Zacks Consensus Estimate for Semiconductor Test revenues is currently pegged at $376 million, indicating 0.27% year-over-year increase.

Also, Industrial Automation revenues are likely to have been aided by strength in Universal Robots and the addition of Mobile Industrial Robots in the quarter to be reported. The Zacks Consensus Estimate for Industrial Automation revenues is currently pegged at $79 million, suggesting 5.3% year-over-year growth.

For the third quarter, management expects total revenues in the range of $540-$580 million. Non-GAAP earnings per share from continuing operations are likely to be in the range of 64-74 cents.

Earnings Whispers

Our proven model does not conclusively predict that Teradyne will beat estimates in the to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.

Earnings ESP: The company has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 70 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Teradyne carries a Zacks Rank #3.

Stocks to Consider

Here are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post a positive earnings surprise in the quarter to be reported.

Cadence Bancorp CADE has an Earnings ESP of +6.12% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Veoneer, Inc. VNE has an Earnings ESP of +7.14% and a Zacks Rank #2.

Arrow Electronics, Inc. ARW has an Earnings ESP of +0.60% and a Zacks Rank of 3.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”

Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.50% per year. So be sure to give these hand-picked 7 your immediate attention.

See them now >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Arrow Electronics, Inc. (ARW) : Free Stock Analysis Report
 
Teradyne, Inc. (TER) : Free Stock Analysis Report
 
Veoneer, Inc. (VNE) : Free Stock Analysis Report
 
Cadence Bancorp (CADE) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research