It has been about a month since the last earnings report for Ametek (AME Quick QuoteAME - Free Report) . Shares have lost about 4.8% in that time frame.

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 the 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 2022 adjusted earnings of $1.38 per share, which beat the Zacks Consensus Estimate by 6.9%. Further, the bottom line rose 20% on a year-over-year basis.

Net sales of $1.51 billion surpassed the Zacks Consensus Estimate of $1.46 billion. Further, the top line rose 9% 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 terms. The AMETEK Growth Model is likely to continue driving the company’s business performance.

Segments in Detail

EIG (67.9% of total sales): AMETEK generated sales of $1.03 billion from the segment, reflecting growth of 10% from the year-ago quarter.

EMG (32.1% of sales): The segment generated $486.3 million of sales in the second quarter, which improved 7% on a year-over-year basis.

Operating Details

For the second quarter, operating expenses were $1.15 billion, up 7.5% year over year. The figure contracted 120 basis points (bps) from the year-ago quarter, as a percentage of net sales, to 75.9%.

Consequently, the operating margin was 24.1%, which expanded 130 bps from the year-ago figure.

The operating margin for EIG expanded 150 bps year over year to 25.8%. The same for EMG expanded 70 bps from the year-ago quarter to 25.6%.

Balance Sheet

As of Jun 30, 2022, cash and cash equivalents were $348.7 million, up from $340.3 million as of Mar 31, 2022.

Inventories amounted to $966.6 million at the end of the second quarter compared with $866.5 million at the end of the prior quarter.

Long-term debt was $2.15 billion in the reported quarter, down from $2.20 billion in the prior quarter.

Guidance

For third-quarter 2022, the company expects sales growth in the mid-single digits on a year-over-year basis.

AMETEK expects adjusted earnings of $1.36-$1.38 per share, suggesting year-over-year growth of 8-10%.

For 2022, the company expects high-single digits of sales growth from that reported in 2021.

The company has revised its guidance for adjusted earnings upward from $5.34-$5.44 per share to $5.46-$5.54 per share, suggesting an increase of 13-14% from that reported in 2021.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

At this time, Ametek has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Ametek has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.