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AMETEK (AME) Q1 Earnings Beat Estimates, Sales Rise Y/Y

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AMETEK, Inc. (AME - Free Report) has reported first-quarter 2022 adjusted earnings of $1.33 per share, which beat the Zacks Consensus Estimate by 4.7%. Further, the bottom line rose 24% on a year-over-year basis.

Net sales of $1.458 billion lagged the Zacks Consensus Estimate of $1.461 billion. However, the top line rose 20% year over year.

Top-line growth was driven by strong performances of the Electronic Instruments Group (“EIG”) and Electromechanical Group (“EMG”) segments 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 — is expected to continue to aid financial growth in the near and long term. The AMETEK Growth Model is likely to continue driving the company’s business performance.

AMETEK, Inc. Price, Consensus and EPS Surprise

 

AMETEK, Inc. Price, Consensus and EPS Surprise

AMETEK, Inc. price-consensus-eps-surprise-chart | AMETEK, Inc. Quote

Segments in Detail

EIG (67.7% of total sales): AMETEK generated sales of $987.8 million from the segment, reflecting growth of 25% from the year-ago quarter. This can primarily be attributed to organic growth and positive contributions from acquisitions.

EMG (32.3% of sales): The segment generated $470.8 million of sales in the first quarter, which improved 11% on a year-over-year basis. The company’s solid operational execution and strong organic growth drove sales growth in the segment.

Operating Details

For the first quarter, operating expenses were $1.1 billion, up 19.8% year over year. The figure contracted 10 basis points (bps) from the year-ago quarter, as a percentage of net sales, to 75.8%.

Consequently, the operating margin was 24.2%, which expanded 10 bps from the year-ago figure.

The operating margin for EIG contracted 140 bps year over year to 24.8%, whereas the same for EMG expanded 250 bps from the year-ago quarter to 27.2%.

Balance Sheet

As of Mar 31, 2022 cash and cash equivalents were $340.3 million, down from $346.8 million as of Dec 31, 2021.

Inventories amounted to $866.5 million at the end of the first quarter compared with $769.2 million at the end of the prior quarter.

Long-term debt was $2.20 billion in the reported quarter, down from $2.23 billion in the prior quarter.

Guidance

For second-quarter 2022, the company expects sales growth of low to mid-single digits on a year-over-year basis. The Zacks Consensus Estimate for second-quarter sales is pegged at $1.52 billion.

AMETEK expects adjusted earnings of $1.27-$1.30 per share, suggesting year-over-year growth of 10-13%. The consensus mark for the same is pegged at $1.33.

For 2022, the company expects high-single digits of sales growth from that reported in 2021. The Zacks Consensus Estimate for 2022 sales is pegged at $6.09 billion.

The company revised its guidance for adjusted earnings upward from $5.30-$5.42 per share to $5.34-$5.44 per share, suggesting an increase of 10-12% from that reported in 2021. The Zacks Consensus Estimate for earnings is pegged at $5.40 per share.

Zacks Rank & Stocks to Consider

AMETEK currently carries a Zacks Rank #3 (Hold).

Investors interested in the broader technology sector can consider stocks like Jabil (JBL - Free Report) , Jack Henry & Associates (JKHY - Free Report) , and Broadcom (AVGO - Free Report) . While Jabil currently sports a Zacks Rank #1 (Strong Buy), Jack Henry & Associates and Broadcom carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Jabil has gained 5.5% over a year. The long-term earnings growth rate for JBL is currently projected at 12%.

Jack Henry & Associates has gained 16.9% over a year. The long-term earnings growth rate for JKHY is currently projected at 17%.

Broadcom has gained 20% over a year. The long-term earnings growth rate for AVGO is currently projected at 14.5%.

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