Teledyne Reports Third-Quarter Sales Decrease, Beats Projections
THOUSAND OAKS, Calif., Oct. 21, 2020 — Teledyne Technologies Inc. reported third-quarter 2020 net sales of $749 million, and a year-over-year decrease of 6.6%, compared to third-quarter net sales of $802.2 million for the third quarter of 2019. The company posted a net income of $93.9 million ($2.48 adjusted earnings per share) for the quarter. The figure is down from $106.7 million ($2.84 diluted earnings per share) for the third quarter of 2019. Earnings per share exceeded the Zacks consensus estimate of $2.40 (3.3%) as well as previously announced GAAP earning ranging from $2.25 to $2.45.
The third quarter of 2020 included $3.9 million in severance, facility consolidation, acquisition, and other costs. The amount is nearly double that of 2019’s third quarter.
Quarterly net sales in the company’s Digital Imaging and Instrumentation segments fell, year over year, by 1.8% and 6.9%. The company reported a decrease in marine instrumentation, test and measurement, and environmental instrumentation as factors. Test and measurement instrumentation include more than $3 million in sales from this year’s acquisition of OakGate Technology Inc.
Lower reported commercial space sales in the Aerospace and Defense Electronics segment contributed to an 18.2% year-over-year decrease in net sales and a 32.4% decrease in total operating income in the segment. Teledyne reported net sales of $101 million for the quarter in its Engineered Systems segment, beating its 2019 third-quarter total by almost $3 million.
“During the third quarter, our shortest-cycle environmental and test and measurement instrumentation businesses experienced a rebound from the trough in the second quarter,” Teledyne Executive Chairman Robert Mehrabian said. Teledyne expects a similar recovery for its medical imaging businesses late in the fourth quarter.
“Our balance sheet has never been stronger and our acquisition pipeline is healthy. Nevertheless, we will continue to be disciplined in capital deployment,” Mehrabian said.
Teledyne additionally reported record third-quarter free cash flow of $135.1 million, and an all-time record free cash flow of $330.5 million for nine months year-to-date.
Teledyne management estimates its 2020 fourth-quarter GAAP diluted earnings per share will be in the range of $2.56 to $2.86 and full-year 2020 GAAP diluted earnings per share will be in the range of $9.70 to $10. The company’s annual expected tax rate for 2020 is 22.7%, before discrete tax items.
In a separate move, Teledyne appointed Michelle Kumbier, former chief operating officer of Harley-Davidson Motor Co., to its board of directors. The appointment was effective Oct. 20, bringing the board to 11 members.
Kumbier joined Harley-Davidson in 1997, serving as its COO until April 2020. In the position, she was responsible for the revenue, profitability, and operating results. Kumbier previously served as Harley-Davidson's senior vice president, motor company product and operations, until 2017, as well as in additional executive capacities. Kumbier is a member of the board of directors of Abbott Laboratories.
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