By Mackenzie Tatananni

Teradyne stock slumped on Tuesday to become the worst performer in the S&P 500 after the maker of electronics testing equipment provided a grim update to its financial forecasts.

Shares sank 17% to $86.81, putting them on pace for the largest same-day percentage decrease since Jan. 27, 2022, when the stock slid 22% in response to weak guidance.

Teradyne is a producer of automated test equipment for semiconductors and other electronic devices. It counts Qualcomm and Texas Instruments among its customers.

Ahead of an analysts' day briefing scheduled for Tuesday afternoon, the company issued an update to its outlook for fiscal 2025 and 2026.

Management now sees "short-term volatility," mainly in the company's semiconductor-testing business. Earlier, it had forecast "improving conditions" in 2025. The update also highlighted uncertainty about tariffs and trade restrictions.

While these headwinds are expected to have no impact on Teradyne's first-quarter outlook, the company said it anticipates revenue will be flat to down 10% in the second quarter. Management sees growth between 5% and 10% in fiscal 2025.

The company said earlier this year that it had shifted about $1 billion worth of manufacturing from China in 2024, after U.S. export regulations disrupted its supply chain. The company manufactured most of its semi-testing equipment at a facility in Suzhou before the move.

In its latest earnings release, Teradyne projected earnings of between 58 cents and 68 cents a share for the first quarter of 2025, along with revenue between $660 million and $700 million. The consensus call among analysts polled by FactSet called for earnings of 63 cents a share and revenue of $694 million. Tuesday's update didn't change management's forecasts for earnings and revenue in the quarter.

The development came one day after Teradyne said it had entered into a definitive agreement to acquire privately held Quantifi Photonics for an undisclosed amount. The deal is expected to close in the second quarter, Teradyne said.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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March 11, 2025 11:20 ET (15:20 GMT)

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