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Teledyne Technologies Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 4, 2012 04:32PM
Teledyne Technologies Inc. (TDY) filed Quarterly Report for the period ended 2012-04-01. Teledyne Tech has a market cap of $2.39 billion; its shares were traded at around $61.89 with a P/E ratio of 16.9 and P/S ratio of 1.2. Teledyne Tech had an annual average earning growth of 17.6% over the past 10 years. GuruFocus rated Teledyne Tech the business predictability rank of 2.5-star.
Highlight of Business Operations:As noted in our revenue recognition critical accounting policy, contract cost and revenue estimates for significant contracts are generally reviewed and reassessed quarterly. The aggregate effects of these changes in estimates on contracts accounted for under the percentage-of-completion accounting method, in the first quarters of 2012 and 2011 were $0.7 million and $0.8 million of favorable operating income and $1.3 million and $0.3 million of unfavorable operating income, respectively.
The development of cost of sales percentages used to record costs under certain fixed-price type contracts and fees under certain cost-reimbursement type contracts accounted for under the POC method of accounting require managements judgment to make reasonably dependable cost estimates for the design, manufacture and delivery of products and services, generally over a long time period. Since certain fixed-price and cost-reimbursement type contracts extend over a long period of time, the impact of revisions in cost and revenue estimates during the progress of work may adjust the current period earnings on a cumulative catch-up basis. This method recognizes, in the current period, the cumulative effect of the changes on current and prior quarters. For fixed-price contracts, if the current contract estimate indicates a loss, a provision is made for the total anticipated loss in the period that it becomes evident. Contract cost and revenue estimates for significant contracts are generally reviewed and reassessed quarterly. These types of contracts and estimates are most frequently related to our sales to the U.S. Government or sales to other defense contractors for ultimate sale to the U.S. Government. The aggregate effects of these favorable and unfavorable changes in estimates for total years 2011, 2010 and 2009 were $4.7 million, $3.5 million and $2.6 million of favorable operating income and $4.4 million, $3.2 million and $1.4 million of unfavorable operating income, respectively. We do not believe that any discrete event or adjustments to an individual contract within the aggregate changes in contract estimates for 2011, 2010 or 2009 was material to the consolidated statements of income for such periods.
Stocks Discussed: TDY,