Chairman, President and Chief Executive Officer at Teledyne Technologies
Thank you, Jason. Good morning and thank you for joining our earnings call. I'm very pleased with our performance this quarter, as well As Teledyne's long history of navigating challenging markets. Despite the strong dollar, supply-chain constraints and inflation, we achieved record third quarter sales, earnings, operating margin and free-cash flow. Excluding foreign currency headwind which negatively impacted third quarter sales growth by approximately 3% or $39 million, core growth in local currency would have been 6.9%. In addition, year-over-year reported sales increased in all segments despite the FX headwinds. Non-GAAP earnings of $4.54 was a third quarter record, and just shy of our all-time record, and our earnings quality was also very high, given our largest effective tax-rate in several years. Overall, orders and demand remains strong which is a testament to the strength of our balanced business portfolio. Total company book-to-bill was 1.06, and while orders remained reasonably healthy in our short-cycle commercial businesses, they were particularly strong in our longer-cycle government, marine and aviation businesses, and quarter-end external backlog of approximately $3.2 billion was also a record. Record third quarter free cash flow of $252 million, improved for the second consecutive quarter, and was 116% of adjusted net income. Our acquisition pipeline is growing, and we're pleased to announce -- we were pleased to announce the pending acquisition of ETM earlier this morning.
Turning to our 2022 full-year outlook. With our strong operating performance in the third quarter, we were able to increase our full-year earnings outlook while derisking the prior heavily-weighted Q4 forecasts. On revenue, given our current exchange rate and the U.S. government's continuing resolution as well as the evolving semiconductor and technology export controls, we're a bit cautious at this time and now project full-year sales of probably roughly $5.45 billion. In the third quarter, we also took the opportunity to refocus Teledyne FLIR by eliminating some smaller money-losing products to help improve our margins. And as a result, we had some cost towards our revenue.
Finally, while supply chain constraints continued to limit shipments, we have seen a modest, very modest improvement in recent weeks, at least with regard to availability of certain printed circuit boards as well as electronic components. I will now further comment on the performance of our four segments.
Starting with our digital imaging segment. Third quarter sales increased 2.3% despite currency translation had been really nearly 4%. Sales growth was strongest for industrial and scientific vision sensors and systems as well as for our low-dose high-resolution digital X-ray detectors. Sales of commercial infrared imaging cameras and components also increased. GAAP segment operating margin was 17.2%, but adjusted for intangible asset amortization, segment margin was 22.9%, a 170 basis-point improvement from the second quarter of this year.
In our instrumentation segment, overall, third quarter sales increased 6.7% versus last year. Sales of electronic test and measurement systems which include oscilloscopes, digitizers, and protocol analyzers remained strong and increased 9.7% year-over-year with growth in all major geographies and product categories. Sales of protocol analyzers across numerous industry standards such as Peripheral Component Interconnect Express, or PCI Express, Universal Serial Bus, or USB, and High-Definition Multimedia Interface, HDMI, remains strong. As well as sales of oscilloscopes and our unique CrossSync product which combine oscilloscopes and protocol analyzers together.
Sales of environmental instruments increased 6.3% compared with last year with greater sales of both drug discovery and laboratory instruments as well as air monitoring and processed gas analyzers. Sales of marine instrumentation increased 5.1% in the quarter primarily due to near record sales of autonomous underwater vehicles for both defense and commercial oceanography application. Overall, instrumentation segment profit increased 12.9% in the third quarter with GAAP operating margin increasing 126 basis points to 22.2% and 83 basis points on a non-GAAP basis. Excluding intangible asset amortization, the margins increased to 24.5%.
In the aerospace and defense electronics segment, third quarter sales increased 4.8% primarily driven by a 20.7% increase in sales of commercial aerospace products. GAAP segment operating profit increased 23.4$ with margin 349 basis points greater than last year. And finally, in our engineered systems segment, third quarter revenue increased 7.2% and operating profit also increased slightly.
Before turning the call over to Sue, I wanted to make a couple of concluding remarks. Over the last 18 months, we have endured the same challenges as most companies. That is, record inflation, supply chain constraints, and now strong U.S. dollar. At the same time, we completed the integration of Teledyne FLIR, our largest acquisition, and then, we rapidly leveraged. While the operating environment remains challenging, we're glad to be back to doing what we do best -- investing in our businesses to drive organic growth, being vigilant on costs and simplifying our operations to increase margins, and finally, acquiring and integrating complementary businesses.
And now, I'll turn the call over to Sue.