Teledyne Technologies (TDY), the Thousand Oaks, California, electronics and imaging company, reported all-time record quarterly sales, operating profit and non-GAAP diluted earnings per share in the third quarter, and raised its full-year 2026 earnings outlook.

Net sales were $1,684.9 million, up 9.4% from $1,539.5 million a year earlier. GAAP diluted earnings were $5.82 a share, up 25.2% from $4.65. Non-GAAP diluted earnings were $6.72 a share, up 20.6% from $5.57. The quarter included $11.7 million of incremental sales from recent acquisitions.

GAAP operating margin was 20.6%, compared with 18.4% a year earlier. Non-GAAP operating margin was 23.9%, compared with 22.1%.

Executive Chairman Robert Mehrabian said third-quarter sales and operating earnings were the strongest in the company’s history. He said organic growth accelerated in Digital Imaging, led by infrared detectors and subsystems for space and unmanned applications, and that each major commercial imaging business, including industrial vision sensors and healthcare, increased year over year. He said orders exceeded sales every quarter over the last three years and that funded backlog was nearly $5.3 billion.

Digital Imaging, the largest reportable segment, posted net sales of $903.0 million, up 15.0% from $785.4 million a year earlier. GAAP operating income was $182.7 million, up 48.1% from $123.4 million. Non-GAAP operating income was $229.6 million, compared with $170.2 million. The company said sales rose primarily on infrared imaging detectors, components and subsystems for defense and commercial use, plus maritime products, integrated defense systems, industrial and scientific imaging, X-ray products and surveillance systems. The segment included $5.5 million of incremental sales from a recent acquisition. The company said the increase in operating income primarily reflected higher net sales and favorable product mix.

Instrumentation net sales were $370.5 million, up 1.9% from $363.6 million. GAAP operating income was $99.6 million, up 0.8% from $98.8 million. The company said the sales increase came from an $8.3 million rise in environmental instrumentation, including $6.2 million from a recent acquisition, and a $3.4 million rise in marine instrumentation, partially offset by a $4.8 million decline in electronic test and measurement.

Aerospace and Defense Electronics net sales were $287.4 million, up 4.3% from $275.5 million, reflecting $16.5 million higher defense electronics sales and $4.6 million lower aerospace electronics sales. GAAP operating income was $77.8 million, up 10.5% from $70.4 million. The company said the increase primarily reflected higher sales and improved margins at recently acquired businesses.

Engineered Systems net sales were $124.0 million, up 7.8% from $115.0 million. GAAP operating income was $13.0 million, up 6.6% from $12.2 million. The company said sales primarily reflected higher engineered products.

Cash provided by operating activities was $352.5 million. Free cash flow was $319.5 million. As of September 27, 2026, net debt was $1,465.4 million, and the consolidated leverage ratio was 0.9 times.

On August 10, 2026, Teledyne entered a definitive agreement to acquire Varex Imaging Corporation in a cash transaction valued at approximately $1.1 billion, considering Varex’s outstanding equity awards and net debt. The company said it plans to fund the deal from cash on hand and available borrowings under its credit facility, that the transaction is expected to close in early 2027, and that Varex will be included in Digital Imaging after close. Prior to the agreement, Teledyne acquired about 1.3 million Varex shares for $13.9 million and recorded a $10.6 million mark-to-market gain in the third quarter.

The company repurchased about 0.2 million shares for $94.8 million during the third quarter. Stock repurchases in September and through October 19 totaled $224.6 million at a weighted average price of $607.03 a share.

Management believes fourth-quarter 2026 GAAP diluted earnings will be $5.68 to $5.83 a share and non-GAAP diluted earnings $6.60 to $6.70 a share. Full-year 2026 GAAP diluted earnings are now expected at $21.71 to $21.87 a share, compared with the prior outlook of $20.73 to $20.99. Full-year 2026 non-GAAP diluted earnings are now expected at $25.40 to $25.50 a share, compared with the prior outlook of $24.45 to $24.65.