Teradyne, Inc. (TER) has reported a 10.72 percent fall in profit for the quarter ended Oct. 02, 2016. The company has earned $63.79 million, or $0.31 a share in the quarter, compared with $71.45 million, or $0.34 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $67.70 million, or $0.33 a share compared with $84.90 million or $0.40 a share, a year ago. Revenue during the quarter dropped 11.91 percent to $410.48 million from $465.99 million in the previous year period. Gross margin for the quarter contracted 11 basis points over the previous year period to 55.39 percent. Total expenses were 86.24 percent of quarterly revenues, up from 81.37 percent for the same period last year. That has resulted in a contraction of 486 basis points in operating margin to 13.76 percent.
Operating income for the quarter was $56.50 million, compared with $86.80 million in the previous year period.
However, the adjusted operating income for the quarter stood at $77.90 million compared to $108.20 million in the prior year period. At the same time, adjusted operating margin contracted 424 basis points in the quarter to 18.98 percent from 23.22 percent in the last year period.
"Third quarter revenue came in above our guidance based on strong demand for our UltraFLEX System-on-a-Chip system," said chief executive officer and president Mark Jagiela. "While tester demand remained strong for mobile devices, we also saw a pick-up in orders for automotive analog and microcontroller testers. This, combined with across the board strength in System Test and Universal Robots, leads us to increase our fourth quarter production plan and puts us on track to deliver annual sales over $1.7B and above model operating profits."
For the fourth-quarter 2016, Teradyne, Inc. expects revenue to be in the range of $330 million to $360 million. The company projects diluted earnings per share to be in the range of $0.17 to $0.26 . On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.18 to $0.25.
Operating cash flow improves
Teradyne, Inc. has generated cash of $408.74 million from operating activities during the nine month period, up 9.70 percent or $36.13 million, when compared with the last year period. The company has spent $268.13 million cash to meet investing activities during the nine month period as against cash outgo of $126.47 million in the last year period.
The company has spent $109.85 million cash to carry out financing activities during the nine month period as against cash outgo of $246.17 million in the last year period.
Cash and cash equivalents stood at $297.94 million as on Oct. 02, 2016, up 1.26 percent or $3.72 million from $294.22 million on Oct. 04, 2015.
Working capital decreases marginally
Teradyne, Inc. has witnessed a decline in the working capital over the last year. It stood at $916.10 million as at Oct. 02, 2016, down 2.64 percent or $24.81 million from $940.92 million on Oct. 04, 2015. Current ratio was at 3.48 as on Oct. 02, 2016, up from 3.38 on Oct. 04, 2015.
Cash conversion cycle (CCC) has decreased to 43 days for the quarter from 71 days for the last year period. Days sales outstanding went down to 51 days for the quarter compared with 53 days for the same period last year.
Days inventory outstanding has decreased to 29 days for the quarter compared with 55 days for the previous year period. At the same time, days payable outstanding was almost stable at 37 days for the quarter, when compared with the previous year period.
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