Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Teradyne Shares Jumped on Wednesday

By Lou Whiteman – Apr 24, 2019 at 8:09PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The electronics testing equipment vendor reported its second straight quarterly earnings beat.

What happened

Shares of Teradyne (TER -3.16%) gained 7.6% on Wednesday, after the electronics testing equipment manufacturer reported earnings that came in ahead of expectations. It's the second straight quarter of outperformance for the company, continuing a great start to 2019.

So what

Teradyne reported first-quarter earnings of $0.54 per share on revenue of $494 million, surpassing analyst consensus estimates of $0.44 per share in earnings on revenue of $476.15 million. The company, a maker of semiconductor test equipment as well as equipment for wireless products and other peripherals, said results came in above guidance because test shipments were slightly better than expected and included robust demand for higher-margin products.

A hand draws a stock chart pointing higher.

Image source: Getty Images.

This is the second straight earnings beat for Teradyne, after easily surpassing analyst expectations in the fourth quarter of 2018. The shares have been a top performer so far in 2019, up 52.9% year to date.

The company also in the quarter acquired Lemsys of Switzerland for an undisclosed sum to augment its portfolio of test equipment for the semiconductor industry.

Now what

Teradyne management expects second quarter earnings of $0.56 to $0.65 per share on revenue of $520 million to $550 million, meaning results could come in ahead of current analyst expectations for earnings of $0.58 per share on revenue of $538.61 million. But the company's outlook for the full year remains "essentially unchanged," CEO Mark Jagiela said in a statement.

Given how far the shares have climbed already in 2019, it's probably best for management to try to temper expectations for the quarters to come.

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.