Teledyne Technologies (TDY) Misses Q1 EPS by 2c, Revenues Miss; Lowers FY20 EPS Guidance Below Consensus

Teledyne Technologies (NYSE: TDY) reported Q1 EPS of $2.17, $0.02 worse than the analyst estimate of $2.19. Revenue for the quarter came in at $784.6 million versus the consensus estimate of $790.17 million.

• Record first quarter sales of $784.6 million, an increase of 5.3% compared to last year
• Record first quarter GAAP diluted earnings per share of $2.17, an increase of 7.4% compared to last year
• Record first quarter GAAP operating margin
• Adjusting full year 2020 GAAP diluted earnings per share outlook to $9.30 to $10.00, a decrease from the prior outlook of $11.20 to $11.30
• Acquired OakGate Technology, Inc.

“Our first priority remains the health and safety of our employees and their families. Up to 40% of our total personnel continue to work from home, and within our manufacturing operations, we are maintaining social distancing and other necessary protocols. Given the challenging operating environment, we are especially pleased to report that Teledyne achieved both record first quarter sales and GAAP diluted earnings per share,” said Robert Mehrabian, Executive Chairman. “Sales of $784.6 million increased 5.3% and included positive organic growth. Likewise, GAAP earnings per share and GAAP operating margin increased despite substantial charges taken in the first quarter. Teledyne’s business portfolio remains exceptionally well-balanced across end markets and geographies. In addition, approximately one half of our businesses are longer-cycle, more predictable and supported by record quarter-end backlog. Nevertheless, our current lower and wider earnings outlook range is a result of the highly uncertain environment. Teledyne’s balance sheet is exceptionally strong, with over $230 million of cash and cash equivalents and more than $600 million available under our credit facility maturing in 2024. Given our ample liquidity and the resilience of our business portfolio, we continue to review and pursue acquisition opportunities.”

GUIDANCE:

Teledyne Technologies sees FY2020 EPS of $9.30-$10.00, versus the consensus of $10.19.

Based on its current outlook, the company’s management believes that second quarter 2020 GAAP diluted earnings per share will be in the range of $1.90 to $2.05 and full year 2020 GAAP diluted earnings per share will be in the range of $9.30 to $10.00. The company’s annual expected tax rate for 2020 is 22.8%, before discrete tax items. In addition, we currently expect significantly less discrete tax items in 2020 compared with 2019. The estimates for second quarter and full year 2020 GAAP diluted earnings per share exclude a future potential charge related to Airbus OneWeb Satellites, LLC (AOS). At the appropriate time, Teledyne may establish a reserve of approximately $40.0 million related to certain accounts receivable and inventory, as well as accrue for other additional AOS-related expenses.

For earnings history and earnings-related data on Teledyne Technologies (TDY) click here.

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