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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Teri Skogerboe who wrote (17007)	3/4/1998 12:30:00 PM
From: Teri Skogerboe	Respond to of 70976

Lehman on Teradyne Headline: Teradyne Inc: Shares Under Pressure On Weaker Order Outlook Author: Edward C. White, Jr., CFA 1(212)526-4744 Rating: 3 Company: TER Country: COM CUS Industry: SEMICO Ticker : TER Rank(Prev): 3-Neutral Rank(Curr): 3-Neutral Price : $41 52wk Range: $59-25 Price Target: $37 Today's Date : 03/02/98 Fiscal Year : DEC ------------------------------------------------------------------------------ EPS 1997 1998 1999 2000 QTR. Actual Prev. Curr. Prev. Curr. Prev. Curr. 1st: 0.20A 0.53E 0.58E 0.73E 0.73E - -E - -E 2nd: 0.33A 0.59E 0.59E 0.76E 0.76E - -E - -E 3rd: 0.45A 0.65E 0.62E 0.79E 0.79E - -E - -E 4th: 0.54A 0.68E 0.66E 0.82E 0.82E - -E - -E ---------------------------------------------------------------------- Year:$ 1.52A $ 2.45E $ 2.45E $ 3.10E $ 3.10E $ - -E $ - -E Street Est.: $ 2.66E $ 2.67E $ 3.23E $ 3.27E $ - -E $ - -E ---------------------------------------------------------------------- Price (As of 2/27): $47 3/16 Revenue (1998): 1.6 Bil. Return On Equity (98): 20.5 % Proj. 5yr EPS Grth: 18.0 % Shares Outstanding: 87.5 Mil. Dividend Yield: Nil Mkt Capitalization: 4.13 Bil. P/E 1998; 1999 : 19.3 X; 15.2 X Current Book Value: $10.87 /sh Convertible: None Debt-to-Capital: 2.4 % Disclosure(s): None ---------------------------------------------------------------------- * Teradyne's shares are down sharply today, on concerns about weaker than expected first quarter order activity. Management has indicated that the 1Q book-to-bill ratio could be below 1.00, with chip test orders of $350-400 mil. * The softer order outlook appears to reflect a number of developments, including the slowdown in the semiconductor equipment industry, and the high rate of installation of test equipment over the past twelve months. * There does not seem to be a specific event that has reduced the order outlook. There has been speculation about lower order activity and loss of market share at Micron, but we think these concerns are probably overdone. * Orders may continue to be soft for the near-term, as chip manufacturers absorb recent purchases. Over the longer term the outlook for Teradyne remains positive -- the company is positioned with an excellent product line. * Our rating on Teradyne's shares remains 3 (Neutral). As order activity slows, EPS are likely to come in below the current Street consensus. The valuation is not excessive, but it is also still well above the recent trough. ---------------------------------------------------------------------- BUSINESS DESCRIPTION: A leading manufacturer of automatic test equipment for the semiconductor industry, printed circuit board testers, telephone line testing equipment and connection systems. ---------------------------------------------------------------------- Disclosure Legend: A-Lehman Brothers Inc. managed or co-managed within the past three years a public offering of securities for this company. B-An employee of Lehman Brothers Inc. is a director of this company. C-Lehman Brothers Inc. makes a market in the securities of this company. G-The Lehman Brothers analyst who covers this company also has position in its securities.