Tektronix beats 2Q estimates

Strong sales, good gross margins and cost reductions led to excellent operating margins for the measurement business

Newly focused Tektronix, said Wednesday net income for its second quarter was $15.2m (£9m), or 32 cents a share, skipping by First Call's estimate by a penny.

Shares in the company closed at 37 9/16 Tuesday. Tektronix, which was a measurement and colour printing businesses, will be a focused measurement company following the completion of the sale of its colour printing division to Xerox. The stock has been growing, boosted by a solid first quarter earnings report.

The company also said sales from continuing operations of $261.3m for the of fiscal year 2000. In September, the company sold its Video and Networking Division (VND) and announced that it would sell its colour printer business to Xerox, so second quarter results reflect only one month of VND sales and account for colour printing as a discontinued operation.

"The measurement business, which constitutes the going forward Tektronix, delivered excellent results on all fronts. The colour printer operations also achieved excellent results for the quarter, which speaks well for the market's reaction to the combination of this business with Xerox," said Jerry Meyer, chairman and chief executive officer of Tektronix.

Measurement sales for the quarter were $253.3m, up 19 percent compared with $213.3m in the same period a year ago. Strong sales, good gross margins and cost reductions led to excellent operating margins for the measurement business, the company said. Strong growth in all geographies except Europe, with a continued resurgence in Asia/Pacific boosted sales and order growth.

The sale of Tektronix's printer business to Xerox is expected to close very early in January, 2000.

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