Teledyne Technologies beat analysts’ expectations when it announced its fourth quarter results Jan. 27, with a slight decrease in revenue but a bump in net income compared to the same quarter a year earlier.

Teledyne, a Thousand Oaks-based industrial and scientific conglomerate, reported earnings per share of $3.48 for the fourth quarter of 2020, up from $3.08 in the fourth quarter of 2019 and better than Zacks Consensus Estimate’s projection of $3.16.

Net sales were down 3% from the previous year, from $834.2 million for the fourth quarter of 2019 to $809.3 million in 2020.

Net income, however, was up nearly 15%, from $115.7 million in 2019 to $132.1 million in the fourth quarter of 2020.

The company concluded 2020 with the best earnings, operating margin and cash flow in its history, according to Executive Chairman Robert Mehrabian.

“Compared to last year, fourth quarter earnings increased 13.7%, operating margin increased 173 basis points and free cash flow increased 50.7%,” Mehrabian said during the company’s earnings call. “It is worth emphasizing the full-year margin and cash flow performance occurred despite over $32 million in non-recurring charges, record-negative GDP in the second quarter, and the constant challenges faced by manufacturers during the COVID-19 pandemic.”

Free cash flow was at $236.4 million in the fourth quarter of 2020, compared to $167.9 million in the same quarter of 2019. For the full year, free cash flow was at $618.9 million, up from $482.1 million in 2019.

Teledyne released its earnings before the stock market opened on Jan. 27. It started the day at $383.58, about the same as the previous day’s close.

Sales for the full year for Teledyne were down 2.4%, from $3.1 billion in 2019 to $3 billion in 2020. Net income was also down slightly, from $402.3 million in 2019 to $401.9 million in 2020.

“We received record orders in the fourth quarter and ended 2020 with a record backlog,” Mehrabian said.

Mehrabian also addressed Teledyne’s pending $8 billion acquisition of Flir Technologies. He said Teledyne has been aware of Flir since 2006, when Flir entered the infrared imaging market.

“We believe then, and we believe now, that our infrared imaging technologies and market segments are uniquely complimentary,” Mehrabian said. “While our respective sensing technologies and market segments are different, the fundamental desire of our end customers is an image or even better information. This is true for X-ray imaging, infrared imaging and even our underwater marine sonar imaging and software businesses. In other words, there is similarity, and synergy in digitalization imaging algorithms, machine learning, and other related technologies, across each of our organizations.”

Mehrabian said that Teledyne is projecting revenue growth between 5% and 6% for 2021. He expects digital imaging to be a big part of that growth. In 2020, digital imaging had net sales of $986 million, down less than 1% from last year. This year, Teledyne expects digital imaging to be up 9%.

“The theme for digital imaging for us is recovery and even though our revenue only went down 1% this year, we expect next year to recover,” he said.

Aerospace and defense electronics were down 14.6% in 2020 compared to 2019, with Mehrabian saying he expects some improvement of about 4%.

Engineered systems were the biggest success in 2020 for Teledyne, up 10.9% with net sales of $416.3 million compared to $375.5 million in 2019. Teledyne finished 2020 with $673.1 million in cash and cash equivalents compared to $199.5 million in 2019.