TERADYNE, INC Quarterly Report for Q2 Ended Jun 30, 2019

Summary

Teradyne, Inc. (TER) reported solid revenue growth in the second quarter of 2019, with total revenues increasing by 7.1% year-over-year to $564.2 million. This growth was primarily driven by strong performance in the Semiconductor Test and Industrial Automation segments. Semiconductor Test revenue saw a 4.1% increase due to demand for 5G infrastructure and services, while Industrial Automation experienced a significant 20.3% jump, bolstered by new product demand and the recent acquisition of Mobile Industrial Robots (MiR). Despite revenue growth, gross profit margin saw a slight decrease to 57.4% from 58.3% in the prior year, mainly due to higher inventory provisions and an unfavorable product mix in the Semiconductor Test segment. Operating expenses increased, particularly in selling and administrative, and engineering and development, largely driven by investments in the Industrial Automation segment. Net income for the quarter was $97.4 million, a slight decrease from $101.0 million in the prior year, resulting in diluted EPS of $0.55 compared to $0.52. The company continued its capital return program, repurchasing shares and paying dividends, indicating confidence in its financial position and future prospects.

Key Highlights

• 1Total revenues increased by 7.1% to $564.2 million in Q2 2019 compared to Q2 2018.
• 2Semiconductor Test revenue grew by 4.1% ($14.8 million) driven by 5G demand and services.
• 3Industrial Automation revenue surged by 20.3% ($12.6 million), benefiting from new products and the MiR acquisition.
• 4Gross profit margin slightly decreased to 57.4% due to higher inventory provisions and product mix.
• 5Net income decreased slightly to $97.4 million from $101.0 million in the prior year's quarter.
• 6Diluted EPS was $0.55, an increase from $0.52 in the prior year's quarter.
• 7The company actively repurchased shares, spending $247.2 million in the first half of 2019.

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