TERADYNE, INC Quarterly Report for Q3 Ended Jul 4, 2010

Summary

Teradyne, Inc.'s quarterly report for the period ended July 4, 2010, reveals a significant rebound in its Semiconductor Test business, leading to a substantial increase in net revenues and a return to profitability. The company reported a net income of $122.1 million for the quarter, a stark contrast to a net loss in the prior year's comparable period. This turnaround was primarily driven by strong demand across various System on a Chip (SoC) product categories. While the Semiconductor Test segment showed robust growth, the Systems Test Group experienced a decline in revenue, impacting overall segment performance. The company's financial position remains solid, with a healthy increase in cash and marketable securities.

Key Highlights

• 1Significant revenue growth of 168% year-over-year to $454.8 million, driven by a 302% increase in Semiconductor Test revenue.
• 2Turnaround to profitability with a net income of $122.1 million ($0.55 diluted EPS) for the quarter, compared to a net loss of $66.8 million ($0.39 diluted loss per share) in the prior year.
• 3Gross profit margin improved significantly to 55.9% from 27.8% year-over-year, benefiting from higher sales volume, favorable product mix, and lower inventory provisions.
• 4Engineering and development expenses increased by $11.9 million, reflecting higher variable compensation and restoration of temporary pay cuts.
• 5Selling and administrative expenses rose by $11.0 million, primarily due to increased variable compensation and restored pay.
• 6The company maintained a strong liquidity position, with cash and cash equivalents and marketable securities totaling $661.3 million as of July 4, 2010.

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