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Teledyne (TDY) Q3 Earnings Top Estimates, Sales Decline Y/Y

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Teledyne Technologies Inc. TDY reported third-quarter 2020 adjusted earnings of $2.48 per share, which surpassed the Zacks Consensus Estimate of $2.40 by 3.3%.

The bottom line, however, declined 12.7% from the prior-year quarter’s earnings of $2.84 per share. The year-over-year downside can be attributed to decreasing sales figures.

However, the quarterly bottom line exceeded the earlier announced GAAP earnings guidance range of $2.25-$2.45.

Operational Highlights

Total sales in the third quarter amounted to $749 million, which missed the Zacks Consensus Estimate of $752.5 million by 0.5%. The top line also declined 6.6% from $802.2 million reported a year ago.

Segmental Performance

Instrumentation: Sales at this segment declined 6.9% year over year to $263.5 million in the third quarter. Lower sales of marine instrumentation, test and measurement instrumentation, and environmental instrumentation led to the downside.

The segment’s operating income declined 2.5% year over year to $50.7 million.

Digital Imaging: Quarterly sales at this division fell 1.8% year over year to $239.7 million.

The decline can be attributed to lower sales of X-ray products for dental and medical applications.

However, the segment’s operating income rose 10.4% year over year to $45.5 million due to a favorable product mix.

Aerospace and Defense Electronics: At this segment, sales of $144.8 million dropped 18.2% from the prior-year quarter due to reduced sales of aerospace electronics and defense and space electronics.

Operating income also plunged 32.4% year over year to $26.7 million on lower sales.

Engineered Systems: Sales at this division grew 2.9% year over year to $101 million in the third quarter on higher sales of engineered products and services, and turbine engines.

Operating income rose 17.9% to $12.5 million on account of higher sales and a greater mix of high-margin fixed-price manufacturing programs.

Teledyne Technologies Incorporated Price, Consensus and EPS Surprise

Teledyne Technologies Incorporated Price, Consensus and EPS Surprise
Teledyne Technologies Incorporated Price, Consensus and EPS Surprise

Teledyne Technologies Incorporated price-consensus-eps-surprise-chart | Teledyne Technologies Incorporated Quote

Financial Condition

Teledyne’s cash totaled $454.5 million as of Sep 27, 2020, compared with $199.5 million at the end of 2019. Total long-term debt summed $761.1 million compared with $750 million at 2019-end.

Cash provided by operating activities was $150.3 million for the third quarter of 2020 compared with $150.9 million for the third quarter of 2019.

In the reported quarter, capital expenditures amounted to $15.2 million compared with $25.1 million in the year-ago quarter.

Moreover, the company generated free cash flow of $135.1 million in the third quarter, reflecting a 7.4% annual growth.

Guidance

Teledyne expects to generate GAAP earnings per share of $2.56-$2.86 in the fourth quarter of 2020. Currently, the Zacks Consensus Estimate for third-quarter earnings is pegged at $2.70 per share, which lies near the midpoint of its bottom-line expectations.

For 2020, the company has raised the lower end of its earlier expected earnings guidance range. Notably, Teledyne currently anticipates generating earnings of $9.70-$10 compared with the earlier expectation of $9.45-$10.

Currently, the Zacks Consensus Estimate for Teledyne’s full-year earnings is pegged at $9.75 per share, which lies below the midpoint of its updated bottom-line expectations.

Zacks Rank

Teledyne currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Lockheed Martin LMT reported third-quarter 2020 earnings from continuing operations of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 3%.

Hexcel Corporation HXL reported third-quarter 2020 loss of 29 cents per share against the Zacks Consensus Estimate of earnings of 7 cents. The bottom line also declined from the prior-year quarter’s earnings per share of 90 cents.

An Upcoming Defense Release

Northrop Grumman NOC is set to release results on Oct 22.

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Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
 
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
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Teledyne Technologies Incorporated (TDY) : Free Stock Analysis Report
 
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