At Teledyne Technologies Inc., some 40 percent of the workforce now works from home while its global manufacturing operations stay open because of the critical functions they provide. Executive Chairman Robert Mehrabian said the coronavirus outbreak has impacted the Thousand Oaks company, but it is not as though it does not know how to deal with these issues. “We’ve done it before,” Mehrabian said during an April 22 conference call with analysts to discuss first quarter financials. “We did it in 2015-16, when oil collapsed; we did it in 2008 and 2009 in the financial crisis.” For the quarter ending March 29, the aerospace, marine and digital imaging products manufacturer reported net income of $82.2 million ($2.17 a share), compared with net income of $75.3 million ($2.02) in the same period a year earlier. Revenue increased 5 percent to $785 million. Teledyne stock has lost about 11 percent of its value since the start of the year when it was $357.49. It went down as low as $201.18 in mid-March, just as the coronavirus pandemic began to affect the U.S. economy. On May 6, the share price closed at $316.87. Greg Konrad, an analyst with Jefferies Financial Group Inc. who follows Teledyne, said in a research note on April 22 that Teledyne’s financial outlook appeared positive even with weak markets in oil and gas exploration and commercial aerospace. “The outlook is better than expected given stable/organic growth in markets such as defense, medical and scientific,” Konrad said in the note. “Portfolio construction should allow (Teledyne) to outperform peers in 2020.” During the conference call, Mehrabian called Teledyne’s portfolio “exceptionally well balanced” across end markets and geographies. “In addition, approximately one half of our businesses are longer cycle, more predictable and supported by a record quarter-ending backlog,” he said, adding that the backlog was valued at about $1.8 billion. Nevertheless, the company faced operational challenges during the quarter due to maintaining appropriate employee density in the workplace, balancing employee absenteeism and the availability of customers to accept product, Mehrabian said. “These operational and HR matters, along with some demand and supply chain issues, likely reduced our first quarter revenue by approximately $15 million,” he added. Recovery timelines Konrad identified the two major headwinds faced by Teledyne in the commercial aerospace and oil and gas industries. The commercial aerospace sector accounted for about 6 percent of the total sales in 2019, while oil and gas exploration was about 4 percent of sales last year. By Konrad’s estimates, aerospace will fall about 50 percent this year to about $110 million in sales, he put in his research note. In the oil and gas industry, Mehrabian said that orders for products will continue well in the next two quarters and then soften in the fourth. “So while the primes are suffering today, I think our suffering will come a little later,” Mehrabian said during the conference call in response to a question about when a recovery would come to the industry. As for commercial aviation, Mehrabian estimated it would take two years for a recovery in the industry. “So the long answer is, the recoveries in both segments, aerospace should be a longer timeframe than energy in my view,” he added Meanwhile, Teledyne still has its eye on acquisitions. The company confirmed last month it was in talks to buy Photonis International SAS, a French company that makes primarily night vision products for military use, for $550 million. Since the company is owned by a private equity firm, it lacks the ability to invest in or acquire digital imaging companies that complement it,” Mehrabian said. “Almost everything we do in our digital imaging (segment) is complimentary to what they have,” he added. In late March, Teledyne was notified by the French Foreign Investment Office that the Ministry of the Economy and Finance was going to issue a negative opinion on the deal. According to Mehrabian, either the minister will affirm his decision or reverse himself and come up with conditions to allow the deal to proceed. The company is used to having conditions placed on it as it already has two operations in France, one in Grenoble when it acquired E2v Technologies plc three years ago, and the second in Arras from the purchase last year of the gas and flame detection business from Minneapolis-based 3M Co. “So if the conditions are not onerous … then we could live with it,” Mehrabian said. “On the other hand, if the conditions are onerous, that would damage our ability to run the company, then we won’t be able to complete the transaction.” A response from the ministry could come shortly or in a couple of months, he added.