Teradyne (TER) Remains 'Outperform' Rated at Cowen Ahead of Q3 Results, Outlook

Cowen and Company affirms Teradyne (NYSE: TER) at Outperform with a price target of $21 heading into the company's Q3 report, which is expected out after markets close today.

Analyst Timothy Arcuri sees Teradyne posting Q3 revenue of $470 million with EPS of $0.41, with the Street at $460 million and $0.40, respectively. This is comprised of semi test $375MM (-11% Q/Q), wireless test $55MM (-20% Q/Q), and systems test $40MM (+14% Q/Q). See orders ~$255MM (-59% Q/Q) comprised of semi test $150MM (-72% Q/Q), wireless test $60MM (up ~15% Q/Q) and systems test $45MM (+13% Q/Q) which may be below where the Street is expecting and a very low headline number.

Arcuri sees little risk to Street Q414 estimates calling for revenue of $336 million and EPS of $0.19.

Arcuri offers the following key items for investors to watch for:

1) Update on wireless test TAM and outlook which seems likely to snap back but potentially off an even lower base given ongoing competitive threats;

2) competitive update for wireless test as market has contracted yet there are still ~5 major players in the market;

3) SoC test outlook into '15 where TER will lose ~$100MM of AAPL revenue (we think), but the underlying business should also be flat to up such that SoC should still be pretty flat Y/Y; and

4) update on usage of ~$5/share net cash barring a long-awaited M&A announcement in the wireless or SSD test verticals.

For an analyst ratings summary and ratings history on Teradyne click here. For more ratings news on Teradyne click here.

Teradyne closed at $17.83 yesterday.

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