SAN FRANCISCO—Automated test equipment vendor LTX-Credence Corp.—set to merge with Verigy Ltd.—reported sales for the quarter ended Oct. 31 that fell short of consensus analysts' expectations Tuesday (Nov. 23). The company also issued guidance for the current quarter that came up short of analysts' estimates.
LTX-Credence (Milpitas, Calif.) reported sales for its fiscal first quarter of $75.6 million, up 3 percent compared with the previous quarter and up 83 percent compared with the year-ago quarter. The company reported a net income for the quarter of $19.7 million, or 39 cents per share, up 40 percent from the previous quarter and compared to a net loss of $3.2 million in the year-ago quarter.
On a pro forma basis, excluding charges, LTX-Credence posted a net income for the quarter of $21.3 million, or 42 cents per diluted share. Consensus analysts' expectations called for LTX-Credence to post sales for the quarter of $77.3 million and pro forma earnings per share of 37 cents, according to Yahoo Finance.
For the current quarter, which closes Jan. 31, 2011, LTX-Credence said it expects sales to decline to between $53 million and $58 million, substantially lower than the $67.4 million that analysts had been expecting. The company said it expects pro forma earnings per share to decline to between 11 and 16 cents, also below what analysts have been forecasting. LTX-Credence blamed $1.5 million in amortization of assets and one-time expenses associated with the Verigy merger.
"As other ATE suppliers have indicated, business conditions have slowed and our guidance reflects the current business environment," said Dave Tacelli, LTX-Credence's president and CEO, in a statement. "We believe this environment is a combination of seasonality and capacity absorption, and expect the long-term fundamentals of our industry and business to remain strong." Last week, Verigy (Cupertino, Calif.) announced it would merge with LTX-Credence, creating a new company to be called Verigy. The deal will be structured as a stock swap, with LTX-Credence shareholders receiving 0.96 shares of the new company for every share of LTX-Credence. The companies expect the transaction to close in the first half of 2011.
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