On January 29, Teradyne projected first-quarter revenue below Wall Street estimates, signaling a decline in demand for its semiconductor-testing equipment. The company's stock dropped by 2% in after-hours trading.
Factors such as high borrowing costs and economic uncertainty have led businesses to curtail investments, impacting demand for Teradyne's products. Specific markets like automotive are still dealing with excess inventory due to the pandemic-induced downturn.
To support growth and profitability, Teradyne, based in North Reading, Massachusetts, plans to "strategically realign" its robotics business. CEO Greg Smith anticipates revenue growth in 2025, focusing on AI compute and memory sectors.
Teradyne specializes in designing technology for chip and electronic equipment testing, as well as providing robotic systems to manufacturing clients. The company, catering to customers like Qualcomm and Texas Instruments, projected first-quarter revenue to range between $660 million and $700 million, falling short of analysts' $694 million estimate.
Adjusted earnings per share are expected to range from 58 cents to 68 cents, below the anticipated 63 cents. In the fourth quarter, Teradyne saw a 12% revenue increase to $752.9 million, surpassing the average estimate of $740.8 million. The company reported an adjusted earnings per share of 95 cents, exceeding the projected 91 cents for the same quarter.