What Awaits Teledyne Technologies (TDY) in Q4 Earnings?

Teledyne Technologies, Inc. TDY is scheduled to release fourth-quarter 2020 results on Jan 27, before market open.

In the last reported quarter, the company delivered a positive earnings surprise of 3.33%.

Moreover, Teledyne has a four-quarter average positive earnings surprise of 9.47%.

Factors at Play

Over the past couple of quarters, the company's instrumentation, digital imaging, aerospace and defense electronics segments have been witnessing a decline in year-over-year revenues, primarily due to the COVID-19 impacts. We believe this trend to have continued in the fourth quarter as well, which is again likely to have resulted in lower digital imaging sales, temporary declines in surgery and cancer radiotherapy sales, and reduced OEM equipment installations. Consequently, such low numbers are likely to have marred the company’s overall top-line performance in the soon-to-be-reported quarter.

Notably, the Zacks Consensus Estimate for Teledyne’s fourth-quarter revenues is pegged at $800.1 million, which indicates a drop of 4.1% from the year-ago quarter’s reported figure.

However, the company, in recent times, has been following an aggressive cost-management process to mitigate the impacts of the pandemic. Moreover, as overall demand for the company's products continues to improve with a gradual recovery observed in the economy, its substantially lower cost structure can be expected to have provided significant operating leverage during the fourth quarter. These, along with acquisition synergies, might have benefited its bottom-line performance.

Notably, the Zacks Consensus Estimate for fourth-quarter earnings per share is pegged at $2.99, which indicates growth of 3.1% from the year-ago quarter’s reported figure.

Recently, Teledyne, in a bid to expand its imaging sensor portfolio, has agreed to buy FLIR Systems FLIR, one of the pioneers in thermal imaging, in a cash-and-stock deal worth $8 billion. We expect the upcoming results to reflect further developments on this transaction, if any.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Teledyne this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Teledyne has an Earnings ESP of +5.86%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here

Teledyne Technologies Incorporated Price and EPS Surprise

Teledyne Technologies Incorporated Price and EPS Surprise

Teledyne Technologies Incorporated price-eps-surprise | Teledyne Technologies Incorporated Quote

Other Stocks to Consider

Here are a couple of other defense companies you may want to consider, as these too have the right combination of elements to post an earnings beat in their upcoming releases:

Raytheon Technologies RTX has an Earnings ESP of +11.47% and a Zacks Rank #3. The company will announce fourth-quarter 2020 earnings on Jan 26.

Leidos Holdings LDOS has an Earnings ESP of +6.79% and a Zacks Rank #2. The company will announce fourth-quarter 2020 earnings on Feb 23.

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FLIR Systems, Inc. (FLIR) : Free Stock Analysis Report
 
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