Teledyne Technologies, the Thousand Oaks-based manufacturer of aerospace, marine, and digital imaging products, saw its share price jump by almost 4% on 24 July after exceeding Wall Street expectations in its second-quarter earnings report.
The company reported adjusted net income of £173 million (US$219 million, or £4.58 per share) for the quarter ending 30 June, slightly down from £177 million (US$224 million, or £4.67 per share) in the same period last year. Revenue, however, dipped by almost 4% year-on-year to £1.09 billion (US$1.37 billion).
Despite the slight decline in revenue, the results surpassed analysts' forecasts. LSEG, a financial markets data provider, had predicted earnings of £4.49 per share on revenue of £1.08 billion (US$1.36 billion).
Following the announcement, Teledyne's share price closed at £329 (US$417) on 24 July, up from £317 (US$402.27) the previous day. The stock closed at £328 (US$415.70) on 25 July, representing a marginal year-on-year increase.
Teledyne's executive chair, Robert Mehrabian, attributed the strong performance to the company's "balanced business portfolio" and its focus on "increasing margins in growing businesses while protecting margins in more challenging markets."
Mehrabian highlighted that orders had exceeded sales for the third consecutive quarter, driven by demand from the aerospace and defence sectors. He also mentioned that Teledyne had ended the second quarter with a record backlog.
"Therefore, we are reasonably confident that quarterly sales will again increase sequentially, and we will return to year-over-year growth in the second half of 2024," Mehrabian stated.
During a conference call with analysts, Mehrabian further explained that the company's free cash flow would be directed towards share buybacks and acquisitions. He also confirmed that Teledyne's debt payments are fixed, with only a £120 million (US$150 million) payment due in October.
"Our interest payments are about 2.35% over the many years," Mehrabian said. "With no significant debt payments due and our low interest rates, we feel good that we can do whatever we want. Right now, we are focused on buying back stock and looking at acquisitions as well."
Mehrabian also confirmed that Teledyne has renewed its line of credit for another five years and currently has around £950 million (US$1.2 billion) at its disposal.
Overall, Teledyne's strong second-quarter results, combined with its strategic focus on share buybacks and acquisitions, point to a positive outlook for the company.