Teradyne Reports Outstanding Q3 Results; Shares Jump 4% Pre-Market

Shares of automation equipment maker Teradyne, Inc. (TER) surged over 4% in early trade on Wednesday following the company’s release of outstanding third-quarter financial results after market close on Tuesday.

Based out of Massachusetts, Teradyne designs and manufactures automatic testing solutions for semiconductors, electronic systems, wireless devices and other products. Its clients include Samsung, Qualcomm (QCOM), Intel (INTC), Analog Devices (ADI), Texas Instruments (TXN) and IBM (IBM).

Adjusted earnings per share (EPS) increased 35% year-over-year to $1.59, beating the Street’s estimate of $1.43 per share. (See Insiders’ Hot Stocks on TipRanks)

Revenue grew 16% year-over-year to $951 million, surpassing analysts’ expectations of $932.88 million. Semiconductor Test revenue totaled $688 million; revenue generated by System Test amounted to $103 million; Wireless Test revenue came in at $69 million and revenue from Industrial Automation (IA) stood at $91 million.

The CEO and President of Teradyne, Mark Jagiela, said, “Demand for both our Test and Industrial Automation products remained strong in Q3 and we delivered our eighth consecutive quarter of double-digit, year-on-year revenue and profit growth.”

“Q4 2021 sales are expected to increase over 10% from Q4 2020’s record level on growing demand in Industrial/Automotive Test, Storage Test, and Industrial Automation. Full-year company sales, GAAP EPS and non-GAAP EPS are expected to grow 18%, 28% and 27%, respectively, at the mid-point of our guidance,” Jagiela added.

The company expects to report revenue of $820 million to $900 million in the fourth quarter. Further, it anticipates EPS in the range of $1.14 to $1.40.

Two months ago, Rosenblatt Securities analyst Scott Graham reiterated a Buy rating on the stock with a price target of $180 (56.3% upside potential). The analyst had expected the company to report EPS of $1.98 in the third quarter.

Overall, the stock has a Strong Buy consensus rating based on 5 Buys and 1 Hold. The average Teradyne price target of $147.83 implies 28.4% upside potential. Shares have gained 31.7% over the past year.

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