Electronics measurement and testing equipment maker Tektronix
What analysts say:
- Buy, sell, or waffle? Ten analyst firms cover this stock. Four of them are buying, five are holding, and the tenth analyst wants to sell. In our Motley Fool CAPS investor community, this is a one-star stock after input from 27 players.
- Revenue. Sales of $294.7 million would still the hunger of your average analyst. That's in the center of management's guidance of $290 million to $300 million.
- Earnings. The Wall Street consensus is $0.42 per share, again right in the middle of the guidance, which is $0.40 to $0.44.
What management says:
In the previous earnings report, CEO Rick Wills noted that "continued strong demand in our instruments business [was] offset by weakness in orders in our communications business due to a difficult comparison to the prior year and further softening in the market for these products."
What management does:
It's steady as she goes on the income statement, but the free cash flow position is greatly improved over the figures a year ago. However, that's a mirage produced by the rolling 12-month figures we use. In the fall of 2005, Tektronix took a $57.8 million charge against cash flows to account for benefit plans and accrued compensation, making the numbers look great when that period rolled off the chart a year later.
|
11/05 |
2/06 |
5/06 |
8/06 |
11/06 |
2/07 |
|
|---|---|---|---|---|---|---|
|
Gross |
59.5% |
59.7% |
59.8% |
60.5% |
60.1% |
59.7% |
|
Operating |
11.9% |
12.5% |
13.0% |
13.8% |
13.2% |
12.2% |
|
Net |
8.2% |
8.1% |
8.9% |
9.2% |
9.0% |
8.6% |
One Fool says:
During the quarter, Tektronix landed a couple of new and expanded equipment deals with European communications networks, received a "preferred quality supplier" award from Intel
The communications market may remain weak to Tektronix, partly because sector consolidation in recent years means fewer companies that need basic testing tools, but the company has a lot going for it.
Management likes its guidance nice and reachable, and I can't find evidence of the company missing its quarterly targets at any time in the last eight years. So expect it to meet or beat again, and keep an eye out for signals on the health of the semiconductor and communications markets. The buck starts with equipment and materials, after all, regardless of where it stops.
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Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure will help you find the road ahead.
