Eagle Test Systems takes off as Q1 profit rises

Shares of Eagle Test Systems, Inc. (Nasdaq: EGLT) were flying high today on news after the close on Tuesday that the maker of automated test equipment for the semiconductor industry reported fiscal first-quarter income above Wall Street’s projections.

The Buffalo Grove, Ill.-based company announced that net income for the three months ended Dec. 31, 2007, was $5.3 million or $0.23 per share, an increase of 36% compared with net income of $3.9 million, or $0.17 per share, a year earlier.

Revenues soared 29% to $31 million from $24 million during the first-quarter of the previous fiscal year.

“I am very pleased with our strong first quarter performance, particularly during these challenging economic times,” said Len Foxman in a statement.

Looking forward, Eagle Test Systems estimates revenues for the second fiscal quarter ending March 31 will be between $30 million and $34 million, above the $29.57 million consensus projection of three analysts polled by Thomson Financial.

“Eagle Test Systems goes through volatile revenue streams,” said Deutsche Bank analyst Peter Kim in a phone interview. “It is heavily leveraged toward its one main customer: Texas Instruments.”

According to Kim, Texas Instruments Inc. (NYSE: TXN) has recently increased its capital spending and focused more on testing. Consequently, the revenue Eagle Test Systems got from the Dallas-based chipmaker increased 117% during the fiscal first-quarter and comprised 46% of all revenues during that period.

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