Strong Sales Offset Asian Drag On Tektronix Earnings

Tektronix Inc. said its third-quarter earnings rose 19 percent on higher sales of color printers and measurement equipment.

For the quarter ended Feb. 28, Tek earned $34.2 million, or 67 cents a diluted share, from $28.8 million, or 57 cents a share in the year-earlier period. Tek, which also makes equipment for video networks, was expected to earn 66 cents a share, the average analyst estimate from IBES International Inc.

Tek said strong sales in its printer and measurement divisions in Europe and North America offset weakness in Asia caused by the financial crisis there. The company also said its three businesses are operating more efficiently. Operating margins - operating income as a percentage of sales - rose to 9.4 percent in the quarter from 8.6 percent a year ago.

“We are extremely pleased with how the organization has been able to respond to the situation,” in Asia, said Jerry Meyer, Tek’s chairman and chief executive. “We’re very pleased with our earnings, which reflect continuing attention to managing costs and improving margins.” Earlier in the week, Tek shares touched 48-3/16, a 52-week high, slipped a bit, then rose 1/4 Friday, closing the week at 47-1/4.

Revenue for the quarter increased 8 percent to $517.6 million from $478.9 million.

“What Wall Street is expecting is doable by us,” said Meyer. “The fourth quarter will look a lot like the third quarter,” with sales growth of 8 to 10 percent.

The company said sales of measurement equipment, including communications test devices, rose 14.4 percent to $240.2 million from $210 million a year ago.

While all three of the company’s divisions were affected by the economic downturn in Asia, Tek said its measurement unit was hurt more than expected. A slowdown in orders from Asian companies and companies doing business in Asia will continue for the next few quarters, Meyer said.

Color printer sales to corporate customers rose 50 percent, driving total color printer sales up 10 percent to $183.7 million, from $167.2 million a year ago.

The company said its troubled video and networking unit produced a small profit and is expected to be more profitable in the fourth quarter. In an effort to return the division to making money, Tek named Tim Thorsteinson as head of the unit in August and fired 250 workers in September.

Wilsonville, Oregon-based Tek said separately that it would buy back as many as 2.5 million of its shares, in addition to the 900,000 remaining from a 1-million-share buyback program begun in August.

Some stocks that moved substantially or traded heavily Friday:

NYSE

Dallas Semiconductor, down 4-1/4 at 34-11/16.

The Dallas-based maker of semiconductor circuits said late Thursday that earnings for the first quarter will be equal to or below the 50 cents a share it earned in last year’s first quarter.

Philip Morris, up 1-11/16 at 43-1/16.

An Indiana jury decided late Thursday that the tobacco industry is not liable in the cancer death of a nonsmoking nurse exposed to secondhand smoke at a veteran’s hospital. Philip Morris was among those companies named in the suit.

NASDAQ

Sun Microsystems, down 2-3/16 at 42-15/16.

Hewlett-Packard said it will produce its own version of the Java software developed by Sun Microsystems.

Cidco, down 2-23/32 at 10-1/16.

The Morgan Hill, Calif.-based maker of subscriber telephone equipment expects to report a “small loss” from operations in the first quarter and to record a charge from streamlining operations.