Robert Mehrabian
Chairman, President and Chief Executive Officer at Teledyne Technologies
Thank you, Jason. Good morning, and thank you for joining our earnings call. In the second quarter, sales increased nearly 21% to about $1.36 billion. In addition, our GAAP operating profit, operating margin and earnings per share were all time or second quarter record. Non-GAAP earnings declined slightly, but last year's non-GAAP margin and earnings resulted in part from a disproportionate amount of sales relative to cost near the end of the quarter at Teledyne player as well as lower share count both due to the mid-quarter closing of the clear transaction in May 2021, including increased foreign currency headwinds, which negatively impacted second quarter sales growth by over 1.7% and or approximately $23 million. Organic growth was 8.2% and accelerated from the first quarter of 2022. Our short-cycle commercial instrumentation and imaging businesses grew strongly in the quarter and sales from our long-cycle aerospace and marine businesses also increased. Finally, our U.S. government sales, including Teledyne FLIR, increased from last year despite lower defense department outlays in the second quarter of 2022.
In summary, year-over-year sales increased in all segments and reported product lines. Overall, demand remains strong, and we achieved record quarterly orders with a total company book-to-bill of 1.08 times. Orders were particularly strong at Teledyne FLIR, where book-to-bill was approximately 1.25 times. Free cash flow improved from the first quarter, but planned inventory levels remained elevated to counter continuing supply chain risk. Finally, our leverage ratio declined to 2.5% and have increased our targeted leverage strange we are again pursuing acquisitions and are pleased to have recently completed our first small bolt-on acquisition at Teledyne FLIR. Turning to our 2022 outlook. Given this recent and significant appreciation of the U.S. dollar, ongoing supply chain constraints and inflation, we believe it's prudent to revise our reported revenue and adjusted earnings outlook modestly for the remainder of the year.
Foreign currency translation impacts our three largest segments and approximately 20% of our total sales with digital imaging and particularly Teledyne FLIR impacted considerably more than other segments. In addition, supply chain constraints continue to limit shipments. Electronic component and other material shortages negatively impacted second quarter sales by approximately $60 million. And we're assuming that a similar shortfall will continue in the remainder of the year. We have conquered both of these headwinds through our various procurement initiatives and strong execution. Nevertheless, we expect total company year-over-year reported organic sales growth of about 4% in each of the third and fourth quarters of 2022 compared with a prior outlook of probably 5% to 6%, resulting in a full year estimated sales of about $5.47 billion.
Despite these headwinds, we continue to see full year organic sales growth, which excludes FLIR of just over 6% and full year sales from Teledyne FLIR slightly greater than the peak sales in 2020, which included over $125 million from cameras for elevated skin temperature testing. Finally, while foreign currency sales and costs are reasonably balanced at Teledyne, there is not any less an impact on earnings. We also remain a bit cautious regarding cost impact of inflation.
Therefore, we're modestly revising our full year adjusted earnings outlook by $0.30 at the midpoint or approximately 1.7% lower than in April. I will now turn the call over to -- no, sorry, I'm going to continue with our performance of our business segment. In Digital Imaging, second quarter sales increased 32.9%, largely due to FLIR acquisition, but organic growth in our combined commercial and government imaging businesses was also very strong at 10.3%. Sales growth was strongest for Industrial and Scientific vision. Sensors and systems as well as for our low-dose ride resolution digital x-ray detectors. GAAP operating margin was 15.2%, but adjusted for intangible asset amortization segment, margin was 21.2%.
In our Instrumentation segment, Overall, second quarter sales increased 7.4% versus last year. Sales of electronic test and measurement systems, which include oscilloscopes, digitizers and protocol analyzers remained strong and increased 11.3% year-over-year. Sales of environmental instruments increased 2.4% compared with last year with greater sales from certain human health and drug discovery products offset by lower sales of industrial and laboratory gas detection devices. Sales of marine instrumentation increased 9.9% in the quarter due to improved energy [Technical Issues] record sales of autonomous underwater vehicles for both defense and commercial oceanography application.
Overall, Instrumentation segment operating profit increased 13.9% in the second quarter, with operating margin increasing 136 basis points for 108 basis points, excluding intangible asset amortization. In the Aerospace and Defense Electronics segment, second quarter sales increased 10.8%, driven by 3.4% growth in defense, space and industrial sales, combined 43.9% increase in sales of commercial aerospace products. GAAP operating margin increased 55.3% with margins 749 basis points rate [Technical Issues]. Finally, in the Engineered Systems segment, second quarter revenue increased slightly, but operating profit and margin declined primarily due to lower sales of fixed price electronics systems. Before turning the call over to Sue, I want to make a few concluding remarks. We continue to focus on strong execution in order to minimize ongoing supply chain risk, inflation and now increased currency headwinds.
While the operating environment remains challenging, we're highly confident of our balanced and resilient mix of commercial and government businesses across a broad range of geographies and end markets. Furthermore, uncertain times have traditionally created opportunities for Teledyne. For example, [Technical Issues] big change in interest rates, we were able to repurchase fixed-rate debt issued just last year at a substantial discount. And while relatively small, the cash paid for the first acquisition for Teledyne FLIR was negotiated and paid in Euros. Given the strength of our management operations and balance sheet now, specifically with our leverage ratio at 2.5 times, which we expect to be further reduced in the balance of the year we were to continue to seek similar and larger acquisitions in the future.
And now I will turn the call over to Sue.
