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Teledyne (TDY) Stock Up on Impressive Q4 Preliminary Results
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Teledyne Technologies, Inc. (TDY - Free Report) recently released its preliminary financial results for fourth-quarter and full-year 2020. Notably, the company expects to achieve an all-time record GAAP earnings per share (EPS) in the soon-to-be-reported quarter.
The industrial conglomerate is yet to release its scheduled date for the fourth-quarter results.
Investors Gain Confidence
Teledyne’s recently announced preliminary results boosted investors’ confidence, offsetting the stock’s decline of 8%, following the announcement of its FLIR Systems acquisition, on Jan 4. Consequently, share price of this company rose 3.6% in the last trading session to close at $375.49 on Jan 5.
In fact, shares of Teledyne have been rallying for quite some time. Notably, the company has gained 4.1% against the industry's 33.4% decline over the past year.
Preliminary Numbers in Detail
Per the latest announcement, the company projects sales of $800 million in the fourth quarter of 2020, which indicates an annual decline of 4.1%. The estimated top-line figure is however higher than the Zacks Consensus Estimate of $786 million.
Moreover, Teledyne expects GAAP EPS in the range of $3.16-$3.19, which reflects stark improvement from the company’s prior guidance of $2.56-$2.86. The updated guidance range also indicates an annual improvement of 3-4% when compared with $3.06 in fourth-quarter 2019.
Currently, the Zacks Consensus Estimate for earnings is pegged at $3.18, which is within the company provided guidance.
For 2020, Teledyne currently expects to generate GAAP earnings per share in the range of $10.30- $10.33, impressive when compared with the prior outlook of $9.70 - $10.00.
The updated guidance range however indicates a decline of 3.7-4% when compared with $10.73 in 2019.
Currently, the Zacks Consensus Estimate for earnings is pegged at $10.32, which lies within the mid-point of the company provided guidance.
Further, Teledyne’s management expects to achieve record cash flow for both the fourth quarter and full year 2020, ending the year with approximately $115 million of net debt.
Factors Influencing Q4 Prelim Results
Teledyne earns its revenues from a wide variety of markets, ranging from aerospace and defense, electronics design and development to medical imaging and pharmaceutical research. While a steady flow of contracts for its combat-proven defense solutions continue to contribute significantly to the company’s quarterly sales, consistent weakness in the commercial aerospace industry, courtesy of the COVID-19 crisis has been impacting its aerospace electronics sales in the last two reported quarters.
In fact, majority of defense equipment stocks like Hexcel (HXL - Free Report) and Curtiss-Wright (CW - Free Report) who have a strong presence in the commercial aerospace have been bearing the brunt of the COVID-19 crisis in the past few months.
Teledyne’s fourth-quarter sales are likely to have suffered due to the lingering effects of the pandemic. This must have paved the way for the company to set a sales target that is lower than the year-ago fourth-quarter’s level.
On the other hand, the company expects to incur a charge of $3 million in the fourth quarter in association of OneWeb’s exit from bankruptcy.
Nevertheless, this should not hurt its bottom line, as the fourth-quarter operating margin of 17.5% that Teledyne expects in its preliminary results indicates a notable improvement of 150 basis points from fourth-quarter 2019.
In particular, Teledyne has been witnessing more or less stable operating margin over the past couple of quarters, in spite of the turmoil created by the COVID-19 crisis, driven by head count management and business simplification initiatives. Such optimistic trends must have encouraged the company to upgrade its earnings outlook for both fourth-quarter and full-year 2020.
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Teledyne (TDY) Stock Up on Impressive Q4 Preliminary Results
Teledyne Technologies, Inc. (TDY - Free Report) recently released its preliminary financial results for fourth-quarter and full-year 2020. Notably, the company expects to achieve an all-time record GAAP earnings per share (EPS) in the soon-to-be-reported quarter.
The industrial conglomerate is yet to release its scheduled date for the fourth-quarter results.
Investors Gain Confidence
Teledyne’s recently announced preliminary results boosted investors’ confidence, offsetting the stock’s decline of 8%, following the announcement of its FLIR Systems acquisition, on Jan 4. Consequently, share price of this company rose 3.6% in the last trading session to close at $375.49 on Jan 5.
In fact, shares of Teledyne have been rallying for quite some time. Notably, the company has gained 4.1% against the industry's 33.4% decline over the past year.
Preliminary Numbers in Detail
Per the latest announcement, the company projects sales of $800 million in the fourth quarter of 2020, which indicates an annual decline of 4.1%. The estimated top-line figure is however higher than the Zacks Consensus Estimate of $786 million.
Moreover, Teledyne expects GAAP EPS in the range of $3.16-$3.19, which reflects stark improvement from the company’s prior guidance of $2.56-$2.86. The updated guidance range also indicates an annual improvement of 3-4% when compared with $3.06 in fourth-quarter 2019.
Currently, the Zacks Consensus Estimate for earnings is pegged at $3.18, which is within the company provided guidance.
For 2020, Teledyne currently expects to generate GAAP earnings per share in the range of $10.30- $10.33, impressive when compared with the prior outlook of $9.70 - $10.00.
The updated guidance range however indicates a decline of 3.7-4% when compared with $10.73 in 2019.
Currently, the Zacks Consensus Estimate for earnings is pegged at $10.32, which lies within the mid-point of the company provided guidance.
Further, Teledyne’s management expects to achieve record cash flow for both the fourth quarter and full year 2020, ending the year with approximately $115 million of net debt.
Factors Influencing Q4 Prelim Results
Teledyne earns its revenues from a wide variety of markets, ranging from aerospace and defense, electronics design and development to medical imaging and pharmaceutical research. While a steady flow of contracts for its combat-proven defense solutions continue to contribute significantly to the company’s quarterly sales, consistent weakness in the commercial aerospace industry, courtesy of the COVID-19 crisis has been impacting its aerospace electronics sales in the last two reported quarters.
In fact, majority of defense equipment stocks like Hexcel (HXL - Free Report) and Curtiss-Wright (CW - Free Report) who have a strong presence in the commercial aerospace have been bearing the brunt of the COVID-19 crisis in the past few months.
Teledyne’s fourth-quarter sales are likely to have suffered due to the lingering effects of the pandemic. This must have paved the way for the company to set a sales target that is lower than the year-ago fourth-quarter’s level.
On the other hand, the company expects to incur a charge of $3 million in the fourth quarter in association of OneWeb’s exit from bankruptcy.
Nevertheless, this should not hurt its bottom line, as the fourth-quarter operating margin of 17.5% that Teledyne expects in its preliminary results indicates a notable improvement of 150 basis points from fourth-quarter 2019.
In particular, Teledyne has been witnessing more or less stable operating margin over the past couple of quarters, in spite of the turmoil created by the COVID-19 crisis, driven by head count management and business simplification initiatives. Such optimistic trends must have encouraged the company to upgrade its earnings outlook for both fourth-quarter and full-year 2020.
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.
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The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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