Will Supply-Chain Challenges Hurt Teledyne's Q3 Earnings?

Teledyne Technologies Incorporated TDY is slated to report third-quarter 2024 results on Oct. 23 before market open.

See the Zacks Earnings Calendar to stay ahead of market-making news.  

Teledyne delivered a four-quarter earnings surprise of 3.47%, on average. Improved sales expectations from two of its four business segments are likely to have boosted TDY’s overall third-quarter top line. However, supply-chain issues might have impacted the bottom line. 

TDY’s Digital Imaging Sales Likely to Decline
 

Strong defense-related sales at Teledyne FLIR and solid sales volume for its legacy space-based infrared imaging detectors are expected to have boosted the Digital Imaging Sales unit’s revenue performance. However, poor sales performance from the industrial machine vision market might have hurt the overall top-line growth of this segment.

The Zacks Consensus Estimate for the Digital Imaging segment’s third-quarter revenues is pegged at $772.1 million. This indicates a decline of 0.5% from the top line reported in the year-ago quarter.

TDY’s Instrumentation Segment: Mixed Expectation
 

The Instrumentation unit’s revenue performance in the third quarter is likely to have benefited from strong offshore energy and subsea defense, along with strong sales of drug discovery and laboratory instruments.  

The Zacks Consensus Estimate for the Instrumentation segment’s revenues is pegged at $346 million, implying a year-over-year rise of 5.1%.

TDY’s Aerospace & Defense Electronics Holds Growth Potential
 

Due to the rapidly growing commercial air traffic in recent times, solid sales of TDY’s commercial aerospace products are expected to have bolstered its Aerospace & Defense Electronics segment’s revenues in the third quarter. Also, higher sales of defense microwave products are likely to have aided this unit’s overall performance.

The Zacks Consensus Estimate for Aerospace and Defense Electronics’ third-quarter revenues is pegged at $196.1 million, implying growth of 7% from the top line reported in the year-ago quarter.

TDY’s Engineered Systems Sales to Reflect Weakness
 

Lower sales of energy systems and engineered products are likely to have hurt Engineered Systems’ revenues.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $110.4 million, implying a decline of 3.4% from the top line reported in the year-ago quarter.

Q3 Estimates for TDY
 

While two of its major four segments are expected to report a notable decline in their quarterly revenues, the other two segments are likely to witness impressive top-line performance. The Zacks Consensus Estimate for revenues is pegged at $1.42 billion, implying a rise of 1.6% from the top line reported in the year-ago quarter.

Despite favorable revenue expectations, persistent supply-chain challenges and cost inflation impact can be projected to have put a dent in TDY’s overall bottom-line performance.

The Zacks Consensus Estimate for third-quarter earnings is pegged at $4.97 per share, indicating a 1.6% decline from the prior-year reported figure.

What the Zacks Model Unveils for TDY
 

Our proven model does not conclusively predict an earnings beat for Teledyne this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as you will see below.

TDY’s Earnings ESP: Teledyne has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

TDY’s Zacks Rank: Currently, Teledyne carries a Zacks Rank #2.

Stocks to Consider
 

Below we have mentioned the following players from the same sector that have the right combination of elements to beat on earnings this reporting cycle.

Lockheed Martin LMT is set to report third-quarter earnings on Oct. 22 before market open. It has an Earnings ESP of +1.29% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for LMT’s third-quarter earnings is pegged at $6.47 per share. The Zacks Consensus Estimate for third-quarter sales is pegged at $17.28 billion, which implies a 2.4% increase from that reported in the prior-year quarter.

Northrop Grumman NOC is slated to report its third-quarter 2024 results on Oct. 24 before market open. It has an Earnings ESP of +1.12% and a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for NOC’s third-quarter earnings stands at $6.06 per share. The Zacks Consensus Estimate for third-quarter sales is pegged at $10.23 billion, which implies a 4.7% increase from that reported in the prior-year quarter.

Curtiss-Wright Corp. CW is set to report third-quarter earnings on Oct. 30 after market close. It has an Earnings ESP of +0.54% and sports a Zacks Rank of 1 at present.

The Zacks Consensus Estimate for third-quarter earnings is pegged at $2.70 per share, indicating an improvement of 6.3% from the prior-year quarter’s reported actuals.  The Zacks Consensus Estimate for sales is pegged at $757.2 million, which implies a 4.5% increase from the top line reported in the prior-year quarter.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. 

See them now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 
Lockheed Martin Corporation (LMT): Free Stock Analysis Report
 
Northrop Grumman Corporation (NOC): Free Stock Analysis Report
 
Teledyne Technologies Incorporated (TDY): Free Stock Analysis Report
 
Curtiss-Wright Corporation (CW): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research