Q2 Rundown: Teledyne (NYSE:TDY) Vs Other Inspection Instruments Stocks

As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the inspection instruments industry, including Teledyne (NYSE:TDY) and its peers.

Measurement and inspection instrument companies may enjoy more steady demand because products such as water meters are non-discretionary and mandated for replacement at predictable intervals. In the last decade, digitization and data collection have driven innovation in the space, leading to incremental sales. But like the broader industrials sector, measurement and inspection instrument companies are at the whim of economic cycles. Interest rates, for example, can greatly impact civil, commercial, and residential construction projects that drive demand.

The 7 inspection instruments stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 1.5% below.

Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.

Luckily, inspection instruments stocks have performed well with share prices up 18.9% on average since the latest earnings results.

Teledyne (NYSE:TDY)

Playing a role in mapping the ocean floor as we know it today, Teledyne (NYSE:TDY) offers digital imaging and instrumentation products for various industries.

Teledyne reported revenues of $1.37 billion, down 3.6% year on year. This print exceeded analysts’ expectations by 1.1%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ operating margin estimates and a decent beat of analysts’ organic revenue estimates.

"In the second quarter, Teledyne achieved all-time record free cash flow, allowing us to deploy approximately $852 million on debt repayment, acquisitions and stock repurchases through July,” said Robert Mehrabian, Executive Chairman.

Interestingly, the stock is up 9.2% since reporting and currently trades at $439.50.

Is now the time to buy Teledyne? Access our full analysis of the earnings results here, it’s free.

Best Q2: Badger Meter (NYSE:BMI)

The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE:BMI) provides water control and measure equipment to various industries.

Badger Meter reported revenues of $216.7 million, up 23.2% year on year, outperforming analysts’ expectations by 6.5%. The business had a stunning quarter with an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ earnings estimates.

Badger Meter pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 12.8% since reporting. It currently trades at $219.

Is now the time to buy Badger Meter? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Mirion (NYSE:MIR)

With its monitoring devices installed on spacecraft, Mirion (NYSE:MIR) offers radiation technology to government agencies, healthcare providers, and industrial companies.

Mirion reported revenues of $207.1 million, up 5% year on year, falling short of analysts’ expectations by 1.7%. It was a disappointing quarter, leaving some shareholders looking for more.

Interestingly, the stock is up 8.3% since the results and currently trades at $11.15.

Read our full analysis of Mirion’s results here.

FARO (NASDAQ:FARO)

Launched by two PhD students in a garage, FARO (NASDAQ:FARO) provides 3D measurement and imaging systems for the manufacturing, construction, engineering, and public safety industries.

FARO reported revenues of $82.09 million, down 6.9% year on year. This number lagged analysts' expectations by 1.9%. It was a slower quarter as it also recorded revenue guidance for next quarter missing analysts’ expectations.

FARO had the weakest performance against analyst estimates among its peers. The stock is up 26.6% since reporting and currently trades at $18.27.

Read our full, actionable report on FARO here, it’s free.

Keysight (NYSE:KEYS)

Spun off from Hewlett-Packard in 2014, Keysight (NYSE:KEYS) offers electronic measurement products for use in various sectors.

Keysight reported revenues of $1.22 billion, down 11.9% year on year. This result surpassed analysts’ expectations by 1.9%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ earnings estimates.

Keysight had the slowest revenue growth among its peers. The stock is up 11.1% since reporting and currently trades at $154.

Read our full, actionable report on Keysight here, it’s free.

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