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Teledyne Technologies (TDY) Q2 Earnings Top, 2021 EPS View Up

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Teledyne Technologies Inc. (TDY - Free Report) reported second-quarter 2021 adjusted earnings of $4.61 per share, which surpassed the Zacks Consensus Estimate of $2.94 by 56.8%. The bottom line also improved 72% from the year-ago quarter’s $2.68.

Including one-time items, the company reported second-quarter GAAP earnings per share of $1.48 compared with the year-ago quarter’s $2.48.

Operational Highlights

In the quarter under review, total sales amounted to $1,121 million, which exceeded the Zacks Consensus Estimate of $1,004 million by 11.7%. Moreover, the top line improved 50.8% from $743.3 million a year ago. Except for the Engineered Systems segment, all other segments recorded solid year-over-year sales growth in the second quarter.

Segmental Performance

Instrumentation: Sales in this segment rose 10.6% year over year to $291.1 million in the second quarter. Increased sales of environmental instrumentation, and test and measurement instrumentation led to the unit’s sales upside.

Operating income rose 33.2% year over year to $64.6 million driven by higher sales and improved margins across most product categories, resulting from ongoing margin improvement initiatives.

Digital Imaging: Quarterly sales at this division increased 143.9% year over year to $579.5 million. The improvement can be attributed to incremental net sales from the FLIR acquisition as well as organic sales growth from industrial and scientific sensors and cameras, micro-electromechanical systems and geospatial imaging software.

Operating income grew 80.8% year over year to $84.6 million, reflecting the benefits of organic sales growth.

Aerospace and Defense Electronics: In this segment, quarterly sales of $152.4 million increased 6.5% from the prior-year quarter on account of higher sales for defense and space electronics.

Moreover, operating income soared 62.3% year over year to $28.4 million, driven by higher sales and a lower cost structure due to actions taken in 2020, lower severance, facility consolidation expenses and lower research and development costs..

Engineered Systems: Sales in this division dropped 1.5% year over year to about $98 million in the second quarter on account of lower sales of turbine engines.

Operating income rose 1.9% to $11 million driven by higher sales.

Financial Condition

Teledyne’s cash and cash equivalents totaled $695.1 million as of Jul 4, 2021, compared with $673.1 million at the end of 2020.

Long-term debt was $4,742 million compared with $680.9 million at 2020-end.

Cash from operations at the end of the second quarter amounted to $211.3 million compared with $155.8 million at the end of second-quarter 2020.

In the reported quarter, capital expenditures were $20.8 million compared with $16.6 million in the year-ago quarter. Moreover, the company generated adjusted free cash flow of $257.2 million compared with $139.2 million in the year-ago quarter.

Q3 & 2021 Guidance

Teledyne expects to generate adjusted earnings per share of $3.55-$3.65 in the third quarter of 2021. The Zacks Consensus Estimate for the same is pegged at $3.02 per share.

For 2021, the company now expects to generate adjusted earnings per share in the range of $15.25-$15.50, higher than the prior guided range of $12.00-$12.20. Currently, the Zacks Consensus Estimate for Teledyne’s full-year earnings is pegged at $12.89 per share.

Zacks Rank

Teledyne currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Raytheon Technologies’ (RTX - Free Report) second-quarter 2021 adjusted earnings per share (EPS) of $1.23 outpaced the Zacks Consensus Estimate of 92 cents by 33.7%.

Lockheed Martin (LMT - Free Report) reported second-quarter 2021 adjusted earnings of $7.13 per share, which surpassed the Zacks Consensus Estimate of $6.51 by 9.5%.

Hexcel Corporation (HXL - Free Report) reported second-quarter 2021 adjusted earnings of 8 cents per share, which exceeded the Zacks Consensus Estimate of a penny.

 

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