Teledyne Technologies Inc. TDY reported first-quarter 2020 earnings of $2.28 per share, which surpassed the Zacks Consensus Estimate of $2.10 by 8.6%. The bottom line also improved 12.9% from the year-ago quarter’s $2.02.
The year-over-year bottom-line growth can be attributed to solid sales and an improvement in the operating income in the reported quarter.
Including one-time items, the company reported first-quarter GAAP earnings per diluted share of $2.17, which improved 7.4% from the year-ago quarter’s $2.02.
In the quarter under review, total sales amounted to $784.6 million, which missed the Zacks Consensus Estimate of $785 million by a whisker. However, the top line increased 5.3% from $745.2 million a year ago. Except for the Aerospace and Defense Electronics segment, all other segments recorded solid year-over-year sales growth in the first quarter.
Instrumentation: Sales at this segment rose 11.2% year over year to $285.1 million in the first quarter. Increased sales of environmental instrumentation, marine instrumentation, and test and measurement instrumentation led to the upside.
Operating income rose 27.3% year over year to $50.8 million on account of increased sales and higher margins across most product lines.
Digital Imaging: Quarterly sales at this division increased 6.2% year over year to $246.7 million. The improvement can be attributed to increased sales of infrared detectors for defense applications, MEMS products and X-ray detectors for life sciences applications, as well as $8.8 million in incremental sales from the 2019 acquisitions.
Operating income grew 19.7% year over year to $43.8 million, backed by higher sales and product mix differences.
Aerospace and Defense Electronics: At this segment, quarterly sales of $156.3 million declined 6.2% from the prior-year quarter owing to decreased sales for aerospace electronics. The weakness in the commercial aerospace industry has affected sales of aerospace electronics in the quarter.
Operating income plunged 58.8% year over year to $13.4 million, driven by lower sales and $8.2 million of severance, facility consolidation and certain contract adjustment costs.
Engineered Systems: Sales at this division grew 7.6% year over year to about $96.5 million in the first quarter. The uptick was driven by higher sales of engineered products and energy systems.
Operating income surged 78.1% to $11.4 million on account of higher sales and improved mix of manufacturing programs.
Lockheed Martin Corporation Price, Consensus and EPS Surprise
Lockheed Martin Corporation price-consensus-eps-surprise-chart | Lockheed Martin Corporation Quote
Teledyne’s cash and cash equivalents totaled $231.4 million as of Mar 29, 2020, compared with $199.5 million at the end of 2019. Long-term debt summed $749.1 million compared with $750 million at 2019-end.
Cash from operations at the end of the first quarter amounted to $76.4 million compared with $80.1 million at the end of first-quarter 2019.
In the reported quarter, capital expenditures were $20.2 million compared with $21.3 million in the year-ago quarter. Moreover, the company generated free cash flow of $56.2 million compared with $58.8 million in the year-ago quarter.
Teledyne expects to generate GAAP earnings per share of $1.90-$2.05 in the second quarter of 2020. For 2020, the company has lowered its earnings expectations from $11.20-$11.30 per share to $9.30-$10.
Currently, the Zacks Consensus Estimate for Teledyne’s full-year earnings is pegged at $9.99 per share, which is toward the higher end of its updated bottom-line expectations.
Teledyne currently sports a Zacks Rank #4 (Sell).
A Recent Defense Release
Lockheed Martin Corp. LMT, a Zacks Rank #2 (Buy) stock, reported first-quarter 2020 earnings of $6.08 per share, which surpassed the Zacks Consensus Estimate of $5.76 by 5.5%. The bottom line also improved 1.5% from the year-ago quarter’s $5.99. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Defense Releases
Northrop Grumman Corp. NOC, a Zacks Rank #3 (Hold) company, is scheduled to report first-quarter 2020 results on Apr 29.
General Dynamics GD, a Zacks Rank #3 company, is scheduled to report first-quarter 2020 results on Apr 29.
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