What happened

Shares of Teradyne (TER -4.22%) were up 14.2% as of 2:30 p.m. EDT Thursday after the automation equipment leader announced stronger-than-expected fourth-quarter 2018 results. 

Teradyne's revenue climbed 8.4% year over year to $519.6 million, translating into adjusted (non-GAAP) net income of $113 million, or $0.63 per share, up from $0.46 per share in the same year-ago period. Analysts, on average, were only anticipating earnings of $0.50 per share on revenue of $494.2 million.

Man in suit drawing chart with his finger indicating gains

Image source: Getty Images.

So what

The bulk of Teradyne's top line came from its core semiconductor test business, with $342 million in sales. Meanwhile, industrial automation contributed $84 million in revenue, system test sales arrived at $54 million, and wireless test equipment drove revenue of $40 million.

"We finished 2018 with strong fourth quarter sales above the high end of our guidance driven by upside demand in our Semiconductor and Wireless test businesses," added CEO Mark Jagiela. "For the full year, our Semiconductor Test group delivered record memory and analog revenues, which lessened the impact of lower mobility test shipments."

Now what

For the first quarter of 2019, Teradyne expects revenue of $460 million to $490 million, which should translate into adjusted earnings per share of $0.39 to $0.47. By contrast, most analysts were modeling earnings and revenue near the upper ends of those respective ranges. But given Teradyne's relative outperformance to end 2019, it seems the market is more than willing to forgive its light outlook for now.

Check out the latest Teradyne earnings call transcript.