Teradyne, Inc. (NYSE:TER) reported revenue of $410 million for the third quarter of 2016 of which $322 million was in Semiconductor Test, $37 million in System Test, $28 million in Wireless Test, and $24 million in Industrial Automation. GAAP net income for the third quarter was $63.8 million or $0.31 per share. On a non-GAAP basis, Teradyne’s net income in the third quarter was $67.7 million, or $0.33 per diluted share, which excluded acquired intangible asset amortization, restructuring and other charges, discrete income tax adjustments, and included the related tax impact on non-GAAP adjustments.
Orders in the third quarter of 2016 were $378 million of which $250 million were in Semiconductor Test, $76 million in System Test, $29 million in Wireless Test, and $24 million in Industrial Automation.
“Third quarter revenue came in above our guidance based on strong demand for our UltraFLEX System-on-a-Chip system,” said CEO 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.”
Guidance for the fourth quarter of 2016 is revenue of $330 million to $360 million, with GAAP net income of $0.17 to $0.26 per diluted share and non-GAAP net income of $0.18 to $0.25 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization and includes the related tax impact on non-GAAP adjustments.
Webcast
A conference call to discuss the third quarter results, along with management’s business outlook, will follow at 10 a.m. ET, Thursday, October 27. Interested investors should access the webcast at www.teradyne.com and click on “Investors” at least five minutes before the call begins. Presentation materials will be available starting at 10 a.m. ET. A replay will be available on the Teradyne website at www.teradyne.com/investors.
Non-GAAP Results
In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses non-GAAP results of operations that exclude certain income items and charges. These results are provided as a complement to results provided in accordance with GAAP. Non-GAAP income from operations and non-GAAP net income exclude goodwill and intangible asset impairment charges, acquired intangible asset amortization, pension actuarial gains and losses, fair value inventory step-up related to Universal Robots, discrete income tax adjustments, restructuring and other, and a gain from the sale of an equity investment. GAAP requires that these items be included in determining income from operations and net income. Non-GAAP income from operations, non-GAAP net income, non-GAAP income from operations and non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP performance measures presented to provide meaningful supplemental information regarding Teradyne’s baseline performance before gains, losses or other charges that may not be indicative of Teradyne’s current core business or future outlook. These non-GAAP performance measures are used to make operational decisions, to determine employee compensation, to forecast future operational results, and for comparison with Teradyne’s business plan, historical operating results and the operating results of Teradyne’s competitors. Non-GAAP gross margin excludes inventory step-up and pension actuarial gains and losses. GAAP requires that these items be included in determining gross margin. Non-GAAP gross margin dollar amount and percentage are non-GAAP performance measures that management believes provide useful supplemental information for management and the investor. Management uses non-GAAP gross margin as a performance measure for Teradyne’s current core business and future outlook and for comparison with Teradyne’s business plan, historical gross margin results and the gross margin results of Teradyne’s competitors. Management believes each of these non-GAAP performance measures provides useful supplemental information for investors, allowing greater transparency to the information used by management in its operational decision making and in the review of Teradyne’s financial and operational performance, as well as facilitating meaningful comparisons of Teradyne’s results in the current period compared with those in prior and future periods. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this press release is contained in the attached exhibits and on the Teradyne website at www.teradyne.com by clicking on “Investors” and then selecting the “GAAP to Non-GAAP Reconciliation” link. The non-GAAP performance measures discussed in this press release may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.
About Teradyne
Teradyne (NYSE:TER) is a leading supplier of automation equipment for test and industrial applications. Teradyne Automatic Test Equipment (ATE) is used to test semiconductors, wireless products, data storage and complex electronic systems, which serve consumer, communications, industrial and government customers. Our Industrial Automation products include Collaborative Robots used by global manufacturing and light industrial customers to improve quality and increase manufacturing efficiency. In 2015, Teradyne had revenue of $1.64 billion and currently employs approximately 4,200 people worldwide. For more information, visit www.teradyne.com. Teradyne(R) is a registered trademark of Teradyne, Inc. in the U.S. and other countries.
