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Why Is Ametek (AME) Up 9.5% Since Last Earnings Report?

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It has been about a month since the last earnings report for Ametek (AME - Free Report) . Shares have added about 9.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Ametek due for a pullback? 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 drivers.

AMETEK Beats Q3 Earnings Estimates

AMETEK reported third-quarter 2022 adjusted earnings of $1.45 per share, beating the Zacks Consensus Estimate by 5.8%. The bottom line rose 15% on a year-over-year basis.

Net sales of $1.55 billion came ahead of the Zacks Consensus Estimate of $1.52 billion. Further, the top line rose 8% 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, including operational excellence, global market expansion, investments in product development and acquisitions, are expected to continue aiding financial growth in the near and the long term. The AMETEK Growth Model is likely to continue driving AME’s business performance.

Segments in Detail

EIG (67.9% of total sales): AMETEK generated sales of $1.05 billion from the segment, reflecting growth of 7% from the year-ago quarter’s level.

EMG (32.1% of sales): The segment generated $497.7 million of sales in the third quarter, which improved 7% on a year-over-year basis.

Operating Details

For the third quarter, operating expenses were $1.2 billion, up 5.8% year over year. The figure contracted 140 basis points (bps) from the year-ago quarter’s level, as a percentage of net sales, to 75.2%.

Consequently, the operating margin was 24.8%, which expanded 140 bps from the year-ago quarter’s figure.

The operating margin for EIG expanded 90 bps year over year to 25.9%. The same for EMG expanded 240 bps from the year-ago quarter’s level to 27.4%.

Balance Sheet

As of Sep 30, 2022, cash and cash equivalents were $309.9 million, down from $348.7 million as of Jun 30, 2022.

Inventories amounted to $1.02 billion at the end of the third quarter compared with $966.6 million at the end of the prior quarter.

Long-term debt was $2.08 billion in the reported quarter, down from $2.15 billion in the prior quarter.


For fourth-quarter 2022, management expects sales growth in mid-single digits from the year-ago quarter’s reported figure.

AMETEK expects adjusted earnings of $1.45-$1.47 per share, suggesting growth of 6-7% from the year-ago quarter’s reported number.

For 2022, AME expects 10% sales growth from the 2021 level. Previously, management had expected sales growth in high-single digits from the 2021 reported figure.

Management lifted its guidance for adjusted earnings from $5.46-$5.54 per share to $5.61-$5.63, suggesting a 16% increase from the 2021 reported level.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

At this time, Ametek has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Ametek has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Ametek belongs to the Zacks Electronics - Testing Equipment industry. Another stock from the same industry, Fortive (FTV - Free Report) , has gained 8.5% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.

Fortive reported revenues of $1.46 billion in the last reported quarter, representing a year-over-year change of +12%. EPS of $0.79 for the same period compares with $0.66 a year ago.

For the current quarter, Fortive is expected to post earnings of $0.84 per share, indicating a change of +6.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.5% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Fortive. Also, the stock has a VGM Score of C.

In-Depth Zacks Research for the Tickers Above

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