Teledyne Technologies (NYSE:TDY) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Teledyne Technologies Incorporated (NYSE:TDY) is scheduled to report Q3 earnings results before markets open for trading on October 21, 2020.

The company is expected to report earnings of $2.40/share on revenue of $751.9 million. The consensus earnings per share (EPS) of $2.40/share is based on a poll of 4 analysts and represents a decline in eps of −6.4% over the same quarter last year, when the company reported earnings of $2.57/share.

The revenue forecast of $751.9 million based on a poll of 5 analysts implies a year-over-year (YoY) decline in revenue of −6.3%. Last year the company reported $802.2 million in revenue for the quarter.

Expected to report EPS contraction of −6.4% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $751.85 $802.20 −6.3%
EPS $2.40 $2.57 −6.4%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Teledyne Technologies Incorporated for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $2.04 $2.68 31.2% Beat
Q1, 2020 $2.10 $2.29 8.9% Beat
Q4, 2019 $2.72 $2.89 6.3% Beat
Q3, 2019 $2.46 $2.57 4.4% Beat
Q2, 2019 $2.42 $2.68 10.8% Beat
Q1, 2019 $1.90 $1.99 5.2% Beat
Q4, 2018 $2.19 $2.32 6.0% Beat
Q3, 2018 $2.06 $2.53 23.0% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 28, 2020, the stock price reacted by falling −2.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 22, 2020 $329.72 $321.79 −2.4% Decline
April 22, 2020 $304.80 $314.55 3.2% Increase
January 22, 2020 $383.33 $368.13 −4.0% Decline
October 23, 2019 $311.65 $333.58 7.0% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.56, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.56 implies a 0.5% chance of earnings manipulation.

Fundamentals And Technical Analysis

Teledyne Technologies Incorporated is currently trading at $335.34/share, up 0.6% for the day. The company is trading at approximately 83.6% of its 52-week high of $398.99/share. The company’s stock price is up 4.2% since the last earnings report and up 2.4% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 62.95 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:TDY Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 30.96 and a forward P/E multiple of 32.53.

Teledyne Technologies Incorporated’s current share price also implies a price-to-book (P/B) multiple of 4.28. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 28, 2020
Stock Price (Current) $335.34
P/E Ratio 31.0x
P/E Ratio (Fwd) 32.5x
PEG Ratio 3.5
Total Debt / Total Capital 7.4%
Levered Free Cash Flow $465.2 million
EV / EBITDA 20.7x

Finbox

Teledyne Technologies Incorporated is a large-cap stock with a market capitalization of $12.283 billion and a total enterprise value of $12.886 billion. The company operates in the Industrials sector and the Aerospace & Defense industry.

Teledyne Technologies Incorporated provides instrumentation, digital imaging, aerospace and defense electronics, and engineered systems in the United States, the United Kingdom, Canada, the Netherlands, and internationally. The company’s Instrumentation segment offers monitoring and control instruments for marine, environmental, industrial, and other applications, as well as electronic test and measurement equipment; and power and communications connectivity devices for distributed instrumentation systems and sensor networks deployed in mission critical and harsh environments. Its Digital Imaging segment provides image sensors and digital cameras for use in industrial, scientific, academic research, and medical applications; and hardware and software for image processing and automatic data collection in industrial, academic research, and medical applications, as well as manufacturing services for micro electro-mechanical systems. This segment also offers light detection and ranging systems; focal plane arrays, sensors, and subsystems; and geospatial software products. The company’s Aerospace and Defense Electronics segment provides electronic components and subsystems, as well as communications products, such as defense electronics; environment interconnects; data acquisition and communications equipment for aircraft; components and subsystems for wireless and satellite communications; and general aviation batteries. Its Engineered Systems segment offers systems engineering and integration, technology development, and manufacturing solutions for defense, space, environmental, and energy applications; and designs and manufactures electrochemical energy systems and electronics for military applications. The company markets and sells its products and services through sales forces, third-party distributors, and commissioned sales representatives. Teledyne Technologies Incorporated was founded in 1960 and is headquartered in Thousand Oaks, California.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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