Summary
Teradyne, Inc.'s (TER) Q2 2016 10-Q filing reveals a significant net loss of $223.5 million for the quarter, largely driven by substantial goodwill and intangible asset impairments totaling $338 million, primarily within the Wireless Test segment. This was a sharp contrast to the profitability in the prior year's quarter. Revenue saw a modest increase of 3.7% year-over-year to $531.8 million, propelled by growth in Semiconductor and System Test, and the contribution from the newly acquired Industrial Automation segment (Universal Robots). However, the Wireless Test segment experienced a significant revenue decline of 64.4%. Despite the top-line growth and strong performance in Semiconductor Test, the significant impairment charges overwhelmed operating profit, leading to the net loss and a diluted loss per share of $1.10. Despite the net loss, the company's financial position remains relatively stable. Cash and cash equivalents increased to $381.1 million. The company continued its share repurchase program and dividend payments. Management is navigating the challenges in the Wireless Test market, attributed to a major customer's operational efficiencies and slower market growth. The company is also addressing operational impacts from the Japan earthquake, with insurance proceeds offsetting impairment charges. Investors should closely monitor the recovery and future demand in the Wireless Test segment, the impact of the ongoing integration of Universal Robots, and the company's ability to manage costs and drive growth in its core Semiconductor Test business amidst industry cyclicality and evolving technology trends.
Financial Highlights
51 data points| Revenue | $531.79M |
| Cost of Revenue | $248.92M |
| Gross Profit | $282.87M |
| SG&A Expenses | $81.42M |
| Operating Expenses | $514.67M |
| Operating Income | -$231.80M |
| Interest Expense | $691K |
| Net Income | -$223.55M |
| EPS (Basic) | $-1.10 |
| EPS (Diluted) | $-1.10 |
| Shares Outstanding (Basic) | 203.02M |
| Shares Outstanding (Diluted) | 203.02M |
Key Highlights
- 1Reported a net loss of $223.5 million for Q2 2016, a significant downturn from a net income of $102.9 million in Q2 2015, primarily due to substantial impairment charges.
- 2Recorded goodwill impairment of $255 million and intangible asset impairment of $83.3 million, largely impacting the Wireless Test segment.
- 3Total revenues increased by 3.7% to $531.8 million in Q2 2016, driven by Semiconductor Test (up 8.7%) and System Test (up 7.0%), and the inclusion of Industrial Automation revenues from the Universal Robots acquisition.
- 4Wireless Test segment revenue declined significantly by 64.4% to $22.4 million, due to reduced demand from a key customer.
- 5Gross profit margin decreased to 53.2% from 58.2% in the prior year's quarter, impacted by product mix and higher inventory provisions.
- 6The company maintained a healthy cash position, with cash and cash equivalents at $381.1 million as of July 3, 2016.
- 7Continued returning capital to shareholders through share repurchases ($56.8 million in the period) and dividends ($24.4 million in the six-month period).