Why Teradyne, Inc. Stock Popped Today

By Markets Fool.com

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

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What:Shares of Teradyne were up 10% as of 11:30 a.m. Friday after the automated test equipment specialist announced solid first-quarter results.

So what:Quarterly revenue climbed 6.7% year over year to $342.4 million, including roughly$271 millionin Semiconductor Test,$37 millionin System Test, and$34 millionin Wireless Test. That translated to adjusted net income of $37.6 million, or $0.17 per diluted share.

Analysts, on average, were expecting revenue and adjusted net income of $331.5 million and $0.12 per share, respectively.

Now what: In addition, orders for the first quarter grew 48% sequentially to $490 million, causing Teradyne to increase second-quarter production plans to meet customer capacity needs.

Consequently, for the current quarter, Teradyne expectsrevenue of$470 millionto$500 million, with adjusted net income per diluted share of$0.42to$0.48. Wall Street was anticipating second-quarter revenue of only $443.8 million, and adjusted net income of $0.35 per share.

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All things considered, Teradyne stock might not look cheap trading at nearly 54 times trailing-12-month earnings. But it looks much more reasonable looking forward trading at 14.6 times next year's estimates. Those estimates are likely to increase after today's impressive report, so I wouldn't be the least bit surprised if the stock continues to climb from here.

The article Why Teradyne, Inc. Stock Popped Today originally appeared on Fool.com.

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