Teledyne Technologies, Inc. (TDY)

Teledyne Technologies is a leading provider of sophisticated electronic components, instruments & communications products, including defense electronics, data acquisition & communications equipment. Its products are used for various applications like airlines and business aircraft, monitoring and control instruments for industrial and environmental applications and components, and subsystems for wireless and satellite communications. The company operates in four segments including Electronics & Communications, Systems Engineering Solutions, Aerospace Engines & Components and Energy Systems.


The company reported 26.1% increase in the revenue for the fourth quarter of 2006 and 18.8% increase on a full year basis. This brings the compounded annual revenue growth rate for the past five years to 16.7% and a compounded annual earnings growth rate of 30.9%. This growth rate has been possible due to the strategy of the company to primarily focus on two of its core markets, defense electronics and instrumentation, which requires specialized technology and have high barriers to entry by improving the operational efficiency and growing both organically and by acquisition. The company has a better breadth and depth of products and the ability to provide integrated solutions to its customers which has made it a much stronger competitor in each of these markets.


Following its acquisition strategy, Teledyne has recently acquired The Rockwell Scientific Company, which provides it a greatly expanded base of technology and highly skilled scientists and engineers. It is expected that this acquisition will exsolidate the pace of product development in its current market and provide the technological resources to expand and become a significant competitor in adjacent market. The company is also planning to acquire D.G. O’Brien, Inc., a design and manufacturing firm focused on systems that transmit signals, data and power for defense, oil and gas exploration, power generation, aerospace and biomedical applications. This is expected to provide further diversity to its customer base.


Looking at the solid business model of the company and its focused and strong strategic approach towards strengthening its business it can be expected that the company has the ability to show an above average performance and live up to the investors expectations.