ATE vendor Teradyne, Inc. today reported Q3 sales of $457.8 million and net income of $41.1 million, or 21 cents per share, but warned sales would drop off sharply in Q4.

The numbers for Q3, leaning toward's the bottom of the company's updated guidance in September, already represent a sequential drop; in the prior quarter Boston-based Teradyne posted sales of $526.5 million and net income of $80.5 million, or 39 cents per share. Net orders for Q2 were $557.9 million. The sequential drop in orders was even more precipitous: net orders in Q3 tallied $284.1 million.

"Our customers sharply lowered their capital spending in the third quarter, resulting in a significant reduction in our orders compared with the second quarter," Mike Bradley, Teradyne's president and CEO, said in a statement. "We're responding to this by lowering our shipment plan and reducing our costs in the fourth quarter.

"At the same time, we're maintaining our investments in new products and customer support," Bradley said. "Our guidance for the fourth quarter is for sales to be between $360 and $380 million, with earnings per share of between break-even and four cents."

In its earnings press release the company didn't elaborate on what the cost reductions would entail. The chip industry is already seeing job cuts in response to current conditions and the industry's near-term outlook; both Freescale Semiconductor and Cymer Inc. announced layoffs today in reporting their Q3 earnings.

Teradyne has a Wednesday morning conference call scheduled to discuss its Q3 results with analysts

By: DocMemory
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