A month has gone by since the last earnings report for Teledyne Technologies (TDY). Shares have lost about 2.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Teledyne due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Teledyne Technologies Q4 Earnings Top Estimates, Sales Rise Y/Y
Teledyne Technologies reported fourth-quarter 2024 adjusted earnings of $5.52 per share, which surpassed the Zacks Consensus Estimate of $5.23 by 5.5%. The bottom line also improved 1.5% from $5.44 recorded a year ago.
The company recorded GAAP earnings of $4.20 per share, down 37.8% from the prior-year level of $6.75.
TDY reported 2024 adjusted earnings of $19.73 per share, which surpassed the Zacks Consensus Estimate of $19.45 by 1.4%. Full-year earnings also was higher than the year-ago figure of $19.69 per share.
The year-over-year improvement in the bottom line can be attributed to higher net sales in the fourth quarter than the year-ago reported actuals.
Total sales were $1.50 billion, which beat the Zacks Consensus Estimate of $1.45 billion by 3.7%. The top line also rose 5.4% from the $1.43 billion reported a year ago. This improvement can be attributed to higher year-over-year sales recorded in all of its business segments.
The company reported sales of $5.67 billion during 2024, which surpassed the Zacks consensus estimate of $5.62 billion. The full-year sales also was higher than the reported figure of $5.64 billion in 2023.
Instrumentation: Sales in this segment increased 10.1% year over year to $368.9 million, driven by higher sales of marine instrumentation, an increase in sales of electronic test and measurement instrumentation as well as sales of environmental instrumentation.
The adjusted operating income increased 11.1% year over year to $100.8 million.
Digital Imaging: Quarterly sales in this division increased 2.5% year over year to $822.2 million. The increase was due to higher sales of unmanned air systems, surveillance systems and commercial infrared imaging systems.
The adjusted operating income dropped 32.4% year over year to $90.8 million.
Aerospace & Defense Electronics: Sales in this segment totaled $196.5 million, up 6.8% from the top line recorded in the prior-year quarter. This improvement was driven by higher sales of defense electronics.
The adjusted operating income increased 12.8% year over year to $56.4 million.
Engineered Systems: Revenues in this division improved 11% year over year to $114.7 million, driven by higher sales of engineered products, particularly electronic manufacturing services products and energy systems.
This segment's operating income dropped 20.3% year over year to $9.8 million.
Teledyne’s cash and cash equivalents totaled $649.8 million as of Dec. 29, 2024, compared with $648.3 million as of Dec. 31, 2023. Its long-term debt was $2.65 billion at the end of the fourth quarter of 2024 compared with $2.64 billion as of Dec. 31, 2023.
Cashflow from operating activities totaled $1.19 billion during 2024 compared with $0.84 billion in the prior year.
Capital expenditure amounted to $29 million in the fourth quarter, down from $40.2 million in the prior-year quarter.
TDY generated free cash flow of $303.4 million, significantly up from $124.2 million in the prior-year quarter.
Teledyne expects to generate adjusted earnings in the band of $4.80-$4.90 per share for the first quarter of 2025. The Zacks Consensus Estimate for first-quarter earnings is pegged at $5.14, higher than the company's guided range.
For 2025, Teledyne expects its adjusted earnings to be in the range of $21.10-$21.50 per share. The Zacks Consensus Estimate for earnings is pegged at $21.62 per share, higher than the company’s guided range.
In the past month, investors have witnessed a downward trend in fresh estimates.
At this time, Teledyne has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Teledyne has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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