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Teledyne Technologies (TDY) Q4 Earnings Beat, Sales Rise Y/Y

Teledyne Technologies Inc. TDY reported fourth-quarter 2022 adjusted earnings of $4.94 per share, which surpassed the Zacks Consensus Estimate of $4.52 by 9.3%. The bottom line improved 8.3% from the year-ago quarter’s $4.56 per share.

Including one-time items, the company reported GAAP earnings of $4.74 per share, which improved 39.8% from the year-ago quarter’s $3.39.

For the full-year 2022, the company reported adjusted earnings of $18.19 per share, which beat the Zacks Consensus Estimate of $17.77 by 2.4%.

Operational Highlights

Total sales in the fourth quarter amounted to $1,418.2 million, which beat the Zacks Consensus Estimate of $1,408 million by 0.7%. The top line improved 3.1% from the $1,375.7 million reported a year ago. All segments recorded higher year-over-year sales in the fourth quarter.

For the full-year 2022, total sales came in at $5,458.6 million, in line with the Zacks Consensus Estimate. Total sales also improved 18.3% year over year.

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

Segmental Performance

Instrumentation: Sales in this segment improved 7.9% year over year to $326.2 million in the fourth quarter. Higher sales across all external product lines led to the upside.

The segment’s operating income improved 15.4% year over year to $82.6 million, driven by higher sales and a favorable product mix.

Digital Imaging: Quarterly sales in this division decreased 0.3% year over year to $806.7 million. The decrease was driven by the lower sales of surveillance and unmanned ground systems for defense applications.

Moreover, the segment’s operating income rose 1.9% year over year to $192.1 million due to lower inventory step-up and acquired intangible amortization expenses in the fourth quarter of 2022.

Aerospace and Defense Electronics: In this segment, sales of $177.9 million went up 8.9% from the prior-year quarter due to the higher sales of aerospace electronics and defense electronics.

The operating income also improved 5.4% year over year to $53 million due to the higher sales of aerospace electronics and improved margins across most defense product categories.

Engineered Systems: Sales in this division increased 6.7% year over year to $107.4 million in the fourth quarter. The increase in sales was mainly due to the higher sales of energy systems and engineered products.

The operating income decreased 17% to $9.3 million, reflecting the impact of lower margins for electronic manufacturing services products.

Financial Condition

Teledyne’s cash and cash equivalents totaled $638.1 million as of Jan 1, 2023 compared with $474.7 million as of Jan 2, 2022. The total long-term debt was $3,620.5 million compared with $4,099.4 million as of Jan 2, 2022.

Its cash provided by operating activities was $486.8 million in 2022 compared with $824.6 million in 2021. In 2022, capital expenditures amounted to $92.6 million, down from $101.6 million in 2021.

Moreover, TDY generated adjusted free cash flow of $690.6 million in 2022, reflecting a 13.1% year-over-year fall.

Guidance

Teledyne expects to generate adjusted earnings in the band of $4.37-$4.47 per share in the first quarter of 2023. The Zacks Consensus Estimate for quarterly earnings, pegged at $4.62, is higher than the midpoint of the guided range.

For 2023, the company expects its earnings in the $19-$19.20 per share range. The Zacks Consensus Estimate of $19.06 per share for 2023 earnings is slightly higher than the midpoint guided range.

Zacks Rank

Teledyne currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Lockheed Martin Corporation LMT reported fourth-quarter 2022 adjusted earnings of $7.79 per share, which surpassed the Zacks Consensus Estimate of $7.41 by 5.1%. The bottom line also improved 7.9% year over year.

In the reported quarter, net sales amounted to $19 billion, which surpassed the Zacks Consensus Estimate of $18.25 billion by 4.1%. The top line rose 7.3% from the $17.7 billion reported in the year-ago quarter.

Raytheon Technologies Corporation’s RTX fourth-quarter 2022 adjusted earnings per share of $1.27 beat the Zacks Consensus Estimate of $1.24 per share by 2.4%. Moreover, the bottom line improved 18% from the year-ago quarter’s adjusted earnings of $1.08 per share.

For the full-year 2022, the company reported adjusted earnings of $4.78 per share, which came in 12% higher than the year-ago figure of $4.27. The full-year bottom line also surpassed the Zacks Consensus Estimate of $4.76 per share by 0.4%.

Upcoming Q4 Defense Earnings

Northrop Grumman Corporation NOC is scheduled to report its fourth-quarter and full-year 2022 results on Jan 26 before market open. The Zacks Consensus Estimate for NOC’s fourth-quarter sales is pegged at $9.66 billion, indicating an increase of 11.8% from the prior-year reported figure.

The Zacks Consensus Estimate for Northrop’s fourth-quarter earnings is pegged at $6.60 per share, indicating an increase of 10% from the prior-year reported figure.

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