Teledyne Technologies Incorporated (NYSE:TDY) Q2 2023 Earnings Call Transcript

Joe Giordano: Just curious on — if you have any color on like the order — the order intake for things like oscilloscopes versus the revenue delivery now? Like I know the revenue is strong, are orders starting to slow there? I’m just curious like what that revenue trend looks like? Like how much backlog do you have? How fast is that kind of coming out? And is it being replenished at the same pace?

Robert Mehrabian: Yes. As you know, on the Test and Measurement, we have 2 distinct product lines. One is oscilloscopes, the other is protocols. And both of those are relatively short-term revenue. So big backlog, which doesn’t make a whole lot of difference. Our oscilloscopes revenue in Q2 was outstanding, really good. Our protocol revenue was relatively flat and partially, that’s because new protocols are coming out in September and we expect that revenue to pick up. If you look at the whole year, we think that we’re going to have something like 3.5% to 4% growth in our oscilloscope and protocol products. We think third and fourth quarter are going to be all right. They may not expand as much as the first quarter but year-over-year, we’re going to be fine. In terms of just answering your question on backlog, book-to-bill in that Test and Measurement is very close to 1, it’s 0.98. So I would say it’s 1. So again, it’s not something that concerns me right now.

Operator: Our next question will be from the line of Greg Konrad with Jefferies.

Greg Konrad: Maybe just one clarification. I mean it seems like you brought down — you didn’t change guidance for the year but brought down digital imaging. You talked about the strength in A&D. Has there been any change to the overall company margin guidance for the year just given it seems like A&D is tracking ahead and instrumentation continues to be maybe slightly above expectations?

Robert Mehrabian: Yes. I’d say, if you went back to April guidance versus today, probably margin is going down 10 basis points. Again, nothing significant. For the full year, we expect margin to go up about 26 to 30 basis points year-over-year. So overall, it’s a — that’s not something that concerns me because as I’ve mentioned several times, because of our diversity of our products, for example, Instruments margin will go up 80 basis points year-over-year. Aerospace and Defense, similarly, 80 basis points. Even Engineered Systems will go up about 38 to 40 basis points. So a flat digital imaging doesn’t change anything at this time.

Greg Konrad: And then, I mean, you talked about FLIR Defense and kind of what you’re seeing on the order front and A&D performance top line was really strong in the quarter. I mean, what are you seeing across Teledyne as it relates to Defense? And how are you kind of thinking about runway just given orders and some of the ’23 budget money coming through?