Under the radar, Teledyne racks up hefty gains

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Shares of Thousand Oaks-based Teledyne Technologies Inc. made it to a record high today the easy way: In one 19% jump, up $9.25 to $57.08, after the company reported better-than-expected first-quarter earnings.

Teledyne is one of those low-profile stocks that has quietly made bundles for its buy-and-hold investors in recent years. The company’s shares are up 264% since the end of 2002, compared with a 57% price gain for the Standard & Poor’s 500 index.

Teledyne, which is expected to post sales of about $1.8 billion this year, owns a host of businesses that make electronic components, instruments and systems for the defense, aviation, satellite, energy and environmental industries. It also produces engines for military aircraft, though that’s a small part of the sales mix.

The company said first-quarter profit was $27.9 million, or 77 cents a share, up 36% from $20.5 million, or 57 cents a year earlier. Analysts had expected profit of 66 cents a share. Sales rose 17% to $452 million.

Teledyne has been masterful at building a portfolio of complementary companies, said John Harmon, an analyst at investment research firm Needham & Co. ‘They acquire companies, integrate them and improve their performance,’ he said. Also, the firm’s business with the Pentagon is spread out, not dependent on any one program, he said.

Despite the weak economy, Teledyne today boosted its profit outlook for the full year, projecting earnings of $2.98 to $3.06 a share compared with a previous range of $2.86 to $2.94. Harmon noted that Teledyne management historically has been conservative in its profit estimates -- which increases the likelihood of pleasant surprises.

If the company’s name sounds familiar it’s because of Teledyne’s storied family history. The original Teledyne was a conglomerate built up by legendary L.A. industrialist Henry Singleton in the 1960s and ‘70s. Singleton, Harmon noted, ‘acquired everything under the sun.’ But by the early-’90s the business model of disparate companies was waning. To escape a hostile takeover Teledyne merged with Allegheny-Ludlum in 1996 to form Allegheny Teledyne. Teledyne Technologies then was spun off from the parent in 1999.

Posted April 23, 2008