Teledyne Technologies Inc. (NYSE:TDY) reported fourth-quarter 2019 adjusted earnings of $2.90 per share, which surpassed the Zacks Consensus Estimate of $2.76 by 5.1%. The bottom-line figure came above the guided range of $2.71-$2.76 for the reported quarter.
Including one-time items, the company reported GAAP earnings of $3.06 per share, which improved 24.9% from the year-ago quarter’s $2.45 driven by solid sales growth and improvement in operating margin.
The company’s 2019 adjusted earnings came in at $10 compared with $8.51 in 2018. The full- year figure missed the Zacks Consensus Estimate of $10.42.
Teledyne Technologies Incorporated Price, Consensus and EPS Surprise
Teledyne Technologies Incorporated price-consensus-eps-surprise-chart | Teledyne Technologies Incorporated Quote
Operational Highlights
Total sales in the fourth quarter amounted to $834.2 million, which exceeded the Zacks Consensus Estimate of $826 million by 1%. The top line also rose 11.5% from $748.4 million reported a year ago. Notably, all segments, except Engineered Systems recorded solid year-over-year sales in the quarter.
For the full year, Teledyne reported sales of $3.16 billion, up 9% from $2,901.8 million in the year-ago period. The full-year top-line figure came in line with the Zacks Consensus Estimate.
Segmental Performance
Instrumentation: Sales at this segment grew 14.5% year over year to $301.6 million in the fourth quarter. Increased sales of environmental instrumentation and marine instrumentation led to the upside.
Operating income surged 38.4% year over year to $59.5 million on account of higher sales and improved margins across most of its product lines.
Digital Imaging: Quarterly sales at this division increased 20.1% year over year to $268.1 million. The improvement can be attributed to higher sales of X-ray detectors for life sciences applications and space, defense, geospatial and MEMS products. Also, sales from the acquisitions of the scientific imaging businesses of Roper Technologies (NYSE:ROP) and Micralyne contributed to this segment’s top-line growth.
Operating income improved 29.8% year over year to $47.1 million due to higher sales and product mix differences.
Aerospace and Defense Electronics: At this segment, quarterly sales of $170.4 million rose 2.7% from the prior-year quarter, owing to increased sales of defense electronics.
Operating income dropped 7.3% year over year to $32.8 million on account of product mix differences.
Engineered Systems: Sales at this division slipped 1.7% year over year to about $94.1 million in the fourth quarter on lower sales of engineered products and energy systems.
Operating income declined 1.9% to $10.5 million on account of lower sales.
Financial Condition
Teledyne’s cash totaled $199.5 million as of Dec 29, 2019, compared with $142.5 million at the end of 2018. Total long-term debt was $750 million compared with $610.1 million at 2018 end.
Cash provided by operating activities was $167.9 million for the fourth quarter of 2019 compared with $125.5 million for the fourth quarter of 2018.
In the reported quarter, capital expenditures amounted to $23.9 million compared with $18.7 million in the year-ago quarter. Moreover, the company generated free cash flow of $144 million in the fourth quarter, reflecting 34.8% year-over-year growth.
Guidance
Teledyne expects to generate GAAP earnings of $2.25-$2.35 per share in the first quarter of 2020.
For 2020, the company expects earnings of $11.20-$11.30 per share. The Zacks Consensus Estimate for Teledyne’s full-year earnings stands at $11.38, higher than the company’s 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.
Upcoming Defense Releases
Lockheed Martin (NYSE:LMT) is set to release its fourth-quarter 2019 results on Jan 28.
Boeing (NYSE:BA) is scheduled to release its fourth-quarter 2019 results on Jan 29.
General Dynamics (NYSE:GD) is set to release its fourth-quarter 2019 results on Jan 29.
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