Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Teledyne Technologies, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Teledyne is expected to report quarterly earnings of $5.01 per share, reflecting a +9.4% change year-over-year, with revenues projected at $1.47 billion, up 7.1% from the previous year [3]. - The consensus EPS estimate has been revised 1.24% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates a positive Earnings ESP of +1.22% for Teledyne, suggesting analysts are optimistic about the company's earnings prospects [12]. - However, Teledyne currently holds a Zacks Rank of 4, complicating predictions of an earnings beat [12]. Historical Performance - Teledyne has consistently beaten consensus EPS estimates, achieving this in the last four quarters [14]. - In the most recent quarter, Teledyne was expected to post earnings of $4.92 per share but delivered $4.95, resulting in a +0.61% surprise [13]. Conclusion - While Teledyne may not be a strong candidate for an earnings beat, investors should consider other factors when evaluating the stock ahead of its earnings release [17].

Core Insights - Axon Enterprise, Inc. (AXON) and Teledyne Technologies Incorporated (TDY) are key players in the aerospace and defense equipment industry, benefiting from increased demand in public safety and surveillance due to rising terrorism and crime rates globally [1] Axon Enterprise, Inc. (AXON) - The Connected Devices segment is a major growth driver for Axon, with revenues increasing by 26.1% year over year in Q1 2025, fueled by the popularity of TASER 10 products and cartridge revenues [2] - Axon's new body-worn camera, Axon Body 4, launched in 2023, has generated significant demand, contributing to the segment's growth [3] - The Software & Services segment is also performing well, with revenues increasing by 39% in Q1 2025 and a year-over-year increase of 33.4% in 2024, driven by a growing user base of the Axon network [4] - Annual recurring revenues (ARR) for Axon reached $1.1 billion in Q1 2025, reflecting a 34% year-over-year increase, supported by high customer satisfaction and demand for digital evidence management [5] - Approximately 70% of Axon's domestic user base is still on basic plans, indicating significant growth potential for the Software & Services segment [6] - However, rising costs and expenses are a concern, with cost of sales and SG&A expenses increasing by 18.2% and 48% year over year, respectively, leading to total operating expenses climbing 54.7% to $374.5 million in Q1 2025 [7] Teledyne Technologies Incorporated (TDY) - Teledyne is experiencing growth due to the recovery in commercial air travel, with first-quarter sales from the Aerospace and Defense Electronics segment improving by 30.6% year over year [8] - The Digital Imaging segment has also shown strength, with first-quarter sales of $757 million, reflecting a 2.2% increase, driven by higher sales of infrared imaging components and surveillance systems [9] - Despite growth, Teledyne faces supply-chain challenges, including increased lead times and cost inflation, which have negatively impacted profit margins and delayed revenue conversion from backlog [11] - In Q1 2025, Teledyne's cost of sales totaled $830 million, a 7.8% year-over-year increase, while SG&A expenses rose by 6.5% [12] - Teledyne's long-term debt reached $2.96 billion, a 12% sequential increase, raising concerns about financial obligations and profitability [13] Price Performance and Valuation - Over the past six months, Axon shares have risen by 25.6%, while Teledyne's stock has gained 12.9% [16] - The Zacks Consensus Estimate for Axon's 2025 sales implies a year-over-year growth of 27.2%, while Teledyne's sales are expected to grow by 6.8% [17][19] - Axon trades at a premium forward P/E ratio of 103.36X, compared to Teledyne's more attractive 23.54X [10][20] Final Assessment - Axon's diversified product portfolio and strong growth in the Connected Devices and Software & Services segments position it favorably in the public safety market, despite its higher valuation [21] - Conversely, Teledyne's growth is hindered by supply-chain issues and high operating costs, along with a highly leveraged balance sheet, suggesting a cautious approach for investors [22] - Overall, Axon appears to be a more favorable investment choice compared to Teledyne at this time [23]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores are designed to help investors identify stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores categorize stocks into four main types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score identifies undervalued stocks using financial ratios [3] - Growth Score emphasizes a company's financial health and future growth potential [4] - Momentum Score tracks price trends to capitalize on upward or downward movements [5] - VGM Score combines all three styles to highlight stocks with the best overall characteristics [6] Zacks Rank and Style Scores Interaction - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investment decisions [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8] - To optimize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] Company Spotlight: Teledyne Technologies - Teledyne Technologies, based in Thousand Oaks, California, operates in various sectors including aerospace, defense, and environmental monitoring [12] - The company currently holds a Zacks Rank of 3 (Hold) and has a VGM Score of B [12] - Teledyne is projected to experience year-over-year earnings growth of 8.8% for the current fiscal year, with a recent increase in earnings estimates [13] - The company has an average earnings surprise of 2.7%, making it a potential candidate for growth investors [13]

2 INVESTOR PRESENTATION | JUNE 2025 1 3 6 NN Markets(b) Sales by Geography(b) 5 7 8 9 10 (a) | Moody's | Baa2 | | --- | --- | | S&P | BBB | | Fitch | BBB | 12 Defense Electronics Surveillance Systems Unmanned Air and Land Vehicles Commercial Aircraft Avionics Bio-MEMS Endoscopy Sensors Ophthalmology Radiotherapy X-Ray Detection Space-based Imaging Radiation-hardened Electronics Satellite Communication Subsystems Semiconductor Development Environmental Testing Network Analyzers Laboratory Instruments Offshor ...

Company Overview - Teledyne Technologies (TDY) shares have increased by approximately 6.3% over the past month, underperforming the S&P 500 index [1] - Recent earnings report indicates a need to analyze important drivers affecting the stock [1] Earnings Estimates - Fresh estimates for Teledyne have trended downward in the past month, indicating a negative outlook [2][4] - The stock currently holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the upcoming months [4] VGM Scores - Teledyne has a Growth Score of B, a Momentum Score of C, and a Value Score of C, resulting in an aggregate VGM Score of C, placing it in the middle 20% for investment strategies [3] Industry Performance - Teledyne is part of the Zacks Aerospace - Defense Equipment industry, where Hexcel (HXL) has gained 3.8% over the past month [5] - Hexcel reported revenues of $456.5 million for the last quarter, reflecting a year-over-year decline of 3.4% [5] - Hexcel's expected earnings for the current quarter are $0.50 per share, indicating a 16.7% decrease from the previous year, with a Zacks Rank 4 (Sell) [6]

Core Insights - Teledyne Technologies' international operations are crucial for assessing its financial resilience and growth prospects [1][2] - The company's total revenue for the quarter was $1.45 billion, reflecting a year-over-year increase of 7.4% [4] International Revenue Breakdown - Revenue from "All other countries" was $117.2 million, accounting for 8.08% of total revenue, which was below the consensus estimate of $119.7 million [5] - Asia contributed $221.8 million, or 15.30% of total revenue, also falling short of the expected $224.71 million [6] - Europe generated $341.6 million, representing 23.56% of total revenue, exceeding the forecast of $339.34 million [7] Future Revenue Projections - Analysts project total revenue of $1.46 billion for the current fiscal quarter, a 6.5% increase from the previous year [8] - For the full year, total revenue is expected to reach $6 billion, up 5.8% from the prior year [9] Market Context - The reliance on international markets presents both opportunities and challenges for Teledyne, making the analysis of international revenue trends essential for future forecasts [10] - The company's stock has increased by 5.8% over the past month, compared to a 9.1% rise in the S&P 500 [12]

Core Viewpoint - The article emphasizes a fundamentals-based approach to value investing, highlighting the importance of long-term growth and robust balance sheets over low multiple stocks [1]. Group 1: Investment Philosophy - The company seeks to identify firms that provide long-term durability at affordable prices, rather than merely focusing on low multiple stocks [1]. - There is a belief that while investing in successful companies carries risks, the potential for significant growth can outweigh immediate price concerns [1]. Group 2: Market Outlook - The business growth outlook for Teledyne Technologies has improved significantly since the last coverage in January, leading to a buy recommendation [1].

Group 1 - The article emphasizes the importance of identifying investment opportunities within the aerospace and defense industries, which are significant contributors to many companies' revenues [1] - The Aerospace Forum, led by an analyst with a background in aerospace engineering, aims to provide data-informed analysis and context for developments in the aerospace, defense, and airline sectors [1] - The investing group offers access to data analytics monitors, enhancing the ability to track and analyze market trends [1] Group 2 - The article does not provide specific financial data or performance metrics related to companies in the aerospace and defense sectors [2]

Financial Performance - Net sales for the first quarter of 2025 increased by 7.4% to $1,449.9 million compared to $1,350.1 million in 2024[89]. - Net income attributable to Teledyne for the first quarter of 2025 rose by 5.7% to $188.6 million, with diluted earnings per share increasing to $3.99 from $3.72[92]. - Operating income rose to $92.7 million, reflecting a 7.8% increase from $86.0 million in the previous year, with operating income as a percentage of net sales improving to 27.0% from 26.0%[110][113]. - Net cash provided by operating activities was $242.6 million for the first three months of 2025, compared to $291.0 million in the same period of 2024[131]. Segment Performance - The Aerospace and Defense Electronics segment saw a significant sales increase of 30.6%, reaching $242.5 million in the first quarter of 2025[89]. - The Aerospace and Defense Electronics segment saw net sales increase by 30.6% to $242.5 million, primarily due to a $57.1 million rise in defense electronics sales[116][117]. - Net sales for the first quarter of 2025 increased to $343.3 million, a 3.9% rise from $330.4 million in 2024, driven by higher sales in Marine Instrumentation and Test and Measurement Instrumentation[110][111]. Expenses and Costs - The cost of sales as a percentage of net sales slightly increased to 57.3% in the first quarter of 2025 from 57.0% in 2024[94]. - Selling, general and administrative (SG&A) expenses increased by $14.2 million, but as a percentage of net sales, it decreased to 16.1% from 16.3%[95]. - Selling, general and administrative expenses increased to $49.7 million, a 5.7% rise from $47.0 million in the previous year[110][112]. - Research and development (R&D) expenses decreased by 2.9% to $74.3 million, primarily due to lower expenses in the Digital Imaging segment[89]. - Research and development expenses rose to $24.2 million, reflecting a 6.1% increase from $22.8 million in the first quarter of 2024[110][112]. Acquisitions and Investments - The company completed two acquisitions in the first quarter of 2025, contributing $55.6 million in incremental sales[93]. - Total debt increased to $2,964.8 million as of March 30, 2025, up from $2,649.0 million at the end of 2024, attributed to borrowings under the credit facility for acquisitions[127]. - Net cash used in investing activities surged to $775.0 million in the first quarter of 2025, primarily due to $757.6 million spent on acquisitions[132]. - The company plans to invest approximately $130 million in capital expenditures for 2025, with capital expenditures for the first three months of 2025 totaling $18.0 million[132]. Tax and Compliance - The effective tax rate for the first quarter of 2025 was 21.0%, compared to 20.6% in 2024[102]. - The company is taking actions to ensure compliance with the Sarbanes-Oxley Act of 2002, although inherent limitations in control systems may lead to undetected misstatements[139]. Strategic Outlook - The company's growth strategy includes potential acquisitions, but there is no assurance on timing or terms, and such acquisitions carry inherent risks[138]. - The company is optimizing operations and facilities to mitigate the impact of tariffs and trade restrictions, particularly those affecting sales to China, which represented approximately 4% of total revenues in 2024[86]. - Readers are encouraged to review periodic reports filed with the SEC for a comprehensive understanding of the company's strategies and risks[140]. - All forward-looking statements are based on information available at the time and are subject to significant risks and uncertainties, with no obligation to update them[141]. - There were no material changes to the market risk disclosures provided in the 2024 Form 10-K[142].

Core Viewpoint - Teledyne Technologies Inc. reported strong first-quarter 2025 results, with adjusted earnings per share of $4.95, exceeding estimates and showing year-over-year growth of 8.8% [1][2]. Financial Performance - Adjusted earnings per share of $4.95 surpassed the Zacks Consensus Estimate of $4.92 by 0.6% and improved from $4.55 in the prior year [1] - GAAP earnings were $3.99 per share, up 7.3% from $3.72 in the previous year [1] Operational Highlights - Total sales reached $1.45 billion, beating the Zacks Consensus Estimate of $1.42 billion by 1.9% and increasing 7.4% from $1.35 billion in the year-ago quarter [3] - The sales growth was driven by higher year-over-year sales across all business segments [3] Segmental Performance - **Instrumentation**: Sales increased 3.9% year over year to $343.3 million, supported by stronger marine instrumentation sales [4] - **Digital Imaging**: Quarterly sales rose 2.2% to $757 million, driven by higher sales of infrared imaging components and surveillance systems [5] - **Aerospace and Defense Electronics**: Sales surged 30.6% to $242.5 million, primarily due to increased defense electronics sales [5] - **Engineered Systems**: Revenues grew 14.9% to $107.1 million, with operating income increasing 300% to $10.8 million [6] Financial Condition - Cash and cash equivalents totaled $461.5 million as of March 30, 2025, down from $649.8 million at the end of 2024 [7] - Long-term debt increased to $2.96 billion from $2.65 billion [7] - Cash flow from operating activities was $242.6 million, down from $291 million [7] Capital Expenditure and Free Cash Flow - Capital expenditure for the first quarter was $18 million, up from $15.9 million in the prior year [8] - Free cash flow decreased to $224.6 million from $275.1 million in the previous year [8] Guidance - Teledyne expects adjusted earnings for Q2 2025 to be in the range of $4.95-$5.05 per share, while the consensus estimate is $5.20 [10] - For the full year 2025, adjusted earnings are expected to be between $21.10-$21.50 per share, with the consensus estimate at $21.46 [10]