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Teradyne collapses on 4Q outlook, downgrades

Chip-equipment maker Teradyne continued its free fall Tuesday, plunging $11.06, or 32 percent, to a 52-week low of $23.38 Tuesday following its third-quarter earnings report.

Teradyne (NYSE: TER) did top analysts' estimates in the quarter, earning $153.5 million, or 84 cents a share, on sales of $848 million.

First Call Corp. consensus expected it to earn 83 cents a share in the quarter.

However, its less-than-scintillating outlook compelled both Chase H&Q and Merrill Lynch to cut the stock.

Company officials said shipments of semiconductor test-related equipment are expected to fall 2 percent to 4 percent in the fourth quarter from the third quarter, resulting in a fourth-quarter profit of between 66 cents to 67 cents a share

First Call Corp. consensus was expecting a profit of 91 cents a share in the quarter.

"The evidence suggests slower growth," CEO George Chamillard said in a conference call. "The level of uncertainty has risen."

Merrill Lynch analyst Brett Hodess cut his near-term and long-term ratings on the stock to "accumulate" from "buy." He also reduced year 2000 revenue estimates to $3.07 billion from $3.17 billion.

Chase H&Q cut the stock from a "buy" rating to a "market perform."

Teradyne shares lost 48 percent of their value Monday ahead of the earnings report.

The stock hit a 52-week high of $115.44 in April before falling to Tuesday's low.