We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Ametek (AME) Down 1.9% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Ametek (AME - Free Report) . Shares have lost about 1.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ametek due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
AMETEK Beats Q2 Earnings Estimates
AMETEK has reported second-quarter 2021 adjusted earnings of $1.15 per share, which beat the Zacks Consensus Estimate by 3.6%. Further, the bottom line rose 37% on a year-over-year basis and 7.5% sequentially.
Net sales of $1.39 billion surpassed the Zacks Consensus Estimate of $1.33 billion. Notably, the top line rose 14% from the previous quarter and 37% year over year.
Top-line growth was driven by strong performances of Electronic Instruments Group (“EIG”) and Electromechanical Group (“EMG”) segments in the reported quarter.
The company’s operational efficiency has been a major positive in the reported quarter.
AMETEK’s proper execution of the four core growth strategies — operational excellence, global market expansion, investments in product development and acquisitions —are expected to continue to aid financial growth in the near and long terms. The AMETEK Growth Model is likely to continue driving the company’s business performance.
Segments in Detail
EIG (67.4% of total sales): AMETEK generated sales of $933.9 million from the segment, reflecting growth of 44% from the year-ago quarter. This can primarily be attributed to organic growth and positive contributions from acquisitions.
EMG (32.6% of sales): The segment generated $452.4 million of sales in the second quarter, which improved 24% on a year-over-year basis. The company witnessed a strong recovery in the margin expansion of the segment.
Operating Details
For the second quarter, operating expenses were $1.1 billion, up 36.3% year over year. The figure contracted 40 basis points (bps) from the year-ago quarter as a percentage of net sales to 77.2%.
Consequently, operating margin was 22.8%, which expanded 40 bps from the year-ago reported figure.
Operating margin for EIG contracted 30 bps year over year to 24.3% and the same for EMG expanded 170 bps from the year-ago quarter to 24.9%.
Balance Sheet & Cash Flow
As of Jun 30, 2021, cash and cash equivalents were $390.6 million, down from $1.1 billion as of Mar 31, 2021.
Inventories amounted to $711.6 million at the end of the second quarter compared with $604.3 million at the end of the prior quarter.
Long-term debt was $2.26 billion in the reported quarter, up from $2.25 billion in the prior quarter.
The company generated $287 million in cash from operation in the second quarter compared with $284.4 million in the previous quarter.
AMETEK generated a free cash flow of $263.5 million in the reported quarter.
Guidance
For third-quarter 2021, the company expects sales growth of mid-20% on a year-over-year basis.
AMETEK expects adjusted earnings of $1.16-$1.18 per share, suggesting year-over-year growth of 15-17%.
For 2021, the company expects year-over-year sales growth of 20%.
The company raised the guidance for adjusted earnings from $4.48-$4.56 per share to $4.62-$4.68, suggesting an increase of 17-18% from that reported in 2020.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Ametek has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ametek has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Ametek (AME) Down 1.9% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Ametek (AME - Free Report) . Shares have lost about 1.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ametek due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
AMETEK Beats Q2 Earnings Estimates
AMETEK has reported second-quarter 2021 adjusted earnings of $1.15 per share, which beat the Zacks Consensus Estimate by 3.6%. Further, the bottom line rose 37% on a year-over-year basis and 7.5% sequentially.
Net sales of $1.39 billion surpassed the Zacks Consensus Estimate of $1.33 billion. Notably, the top line rose 14% from the previous quarter and 37% year over year.
Top-line growth was driven by strong performances of Electronic Instruments Group (“EIG”) and Electromechanical Group (“EMG”) segments in the reported quarter.
The company’s operational efficiency has been a major positive in the reported quarter.
AMETEK’s proper execution of the four core growth strategies — operational excellence, global market expansion, investments in product development and acquisitions —are expected to continue to aid financial growth in the near and long terms. The AMETEK Growth Model is likely to continue driving the company’s business performance.
Segments in Detail
EIG (67.4% of total sales): AMETEK generated sales of $933.9 million from the segment, reflecting growth of 44% from the year-ago quarter. This can primarily be attributed to organic growth and positive contributions from acquisitions.
EMG (32.6% of sales): The segment generated $452.4 million of sales in the second quarter, which improved 24% on a year-over-year basis. The company witnessed a strong recovery in the margin expansion of the segment.
Operating Details
For the second quarter, operating expenses were $1.1 billion, up 36.3% year over year. The figure contracted 40 basis points (bps) from the year-ago quarter as a percentage of net sales to 77.2%.
Consequently, operating margin was 22.8%, which expanded 40 bps from the year-ago reported figure.
Operating margin for EIG contracted 30 bps year over year to 24.3% and the same for EMG expanded 170 bps from the year-ago quarter to 24.9%.
Balance Sheet & Cash Flow
As of Jun 30, 2021, cash and cash equivalents were $390.6 million, down from $1.1 billion as of Mar 31, 2021.
Inventories amounted to $711.6 million at the end of the second quarter compared with $604.3 million at the end of the prior quarter.
Long-term debt was $2.26 billion in the reported quarter, up from $2.25 billion in the prior quarter.
The company generated $287 million in cash from operation in the second quarter compared with $284.4 million in the previous quarter.
AMETEK generated a free cash flow of $263.5 million in the reported quarter.
Guidance
For third-quarter 2021, the company expects sales growth of mid-20% on a year-over-year basis.
AMETEK expects adjusted earnings of $1.16-$1.18 per share, suggesting year-over-year growth of 15-17%.
For 2021, the company expects year-over-year sales growth of 20%.
The company raised the guidance for adjusted earnings from $4.48-$4.56 per share to $4.62-$4.68, suggesting an increase of 17-18% from that reported in 2020.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Ametek has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ametek has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.