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Teledyne Technologies Q4: Earnings Beat, Cautious 2025 Outlook And More

Wesley ParkWednesday, Jan 22, 2025 11:27 am ET

3min read

Teledyne Technologies Incorporated (NYSE:TDY) shares traded higher on Wednesday after the company reported fourth-quarter results that beat analyst expectations. The firm reported sales growth of 5.4% year-over-year (YoY) to $1.502 billion, surpassing the consensus estimate of $1.451 billion. In the fourth quarter, net sales in the Digital Imaging segment stood at $822.2 million (up 2.5% YoY), Instrumentation segment at $368.9 million (+10.1% YoY), Aerospace and Defense Electronics segment at $196.5 million (up 6.8% YoY), and Engineered Systems segment at $114.7 million (+11.0% YoY). Adjusted operating margin remained flat YoY at $22.7% in the quarter, while adjusted EPS came in at $5.52, above the consensus of $5.23.

In fiscal year (FY) 2024, the company had cash from operations of $1.19 billion and a free cash flow of $1.11 billion. Teledyne deployed $1.1 billion for debt repayments, share repurchases, and acquisitions in the year, exiting with cash and equivalents worth $649.8 million. The company expects first-quarter adjusted EPS of $4.80-$4.90 versus the consensus of $5.03 and FY25 adjusted EPS of $21.10-$21.50 versus the $21.58 estimate. Teledyne expects to spend around $770 million on acquisitions in the first quarter of 2025.

Robert Mehrabian, Executive Chairman, stated, "Year-over-year growth accelerated, as our shorter-cycle businesses improved throughout 2024 coupled with strong demand in our longer cycle defense, space, and energy businesses." Mehrabian also mentioned the successful closure of the Micropac acquisition at the beginning of fiscal 2025 and the expected completion of the Excelitas carve-out transaction in the first quarter. However, he cautioned investors about the strong U.S. dollar and unpredictable geopolitical environment.

Investors can gain exposure to Teledyne Technologies via Spinnaker ETF Series Tuttle Capital Self Defense Index ETF (BATS:GUNZ) and Virtus ETF Trust II Virtus KAR Mid-Cap ETF (NYSE:KMID). As of Wednesday's close, TDY shares were trading higher by 5.86% to $508.55.

In conclusion, Teledyne Technologies' strong fourth-quarter results, driven by robust performance across its segments, have positioned the company for continued growth in 2025. Despite a cautious outlook due to external factors, Teledyne's strategic acquisitions and solid financial performance make it an attractive investment opportunity for those seeking exposure to the technology sector.

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