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AMETEK's (AME) Q2 Earnings & Sales Surpass Estimates, Up Y/Y
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AMETEK, Inc. (AME - Free Report) reported second-quarter 2023 adjusted earnings of $1.57 per share, beating the Zacks Consensus Estimate by 3.3%. The bottom line rose 14% on a year-over-year basis.
Net sales of $1.65 billion came in ahead of the Zacks Consensus Estimate of $1.64 billion. The top line rose 9% year over year.
Top-line growth was driven by solid momentum across the Electronic Instruments Group (EIG) and Electromechanical Group (EMG) segments.
AMETEK’s proper execution of the four core growth strategies, including operational excellence, global market expansion, investments in product development and acquisitions, is expected to continue aiding financial growth in the near and long term. The AMETEK Growth Model is likely to continue driving AME’s business performance.
EIG (68.9% of total sales): AMETEK generated sales of $1.135 billion from the segment, reflecting growth of 10% from the year-ago quarter’s level. The figure topped the consensus mark of $1.131 billion.
EMG (31.1% of sales): The segment generated $511.5 million in sales in the second quarter, which improved by 5% on a year-over-year basis. The figure came below the Zacks Consensus Estimate of $520 million.
Operating Details
For the second quarter, operating expenses were $1.23 billion, up 6.7% year over year. The figure contracted by 130 basis points (bps) from the year-ago quarter’s level as a percentage of net sales to 74.6%.
Consequently, the operating margin was 25.4%, which expanded 130 bps from the year-ago quarter’s figure.
The operating margin for EIG expanded 130 bps year over year to 27.1% and that of EMG contracted 100 bps from the year-ago quarter’s level to 26.6%.
Balance Sheet
As of Jun 30, 2023, cash and cash equivalents were $605.6 million, up from $399.9 million as of Mar 31, 2023.
Inventories amounted to $1.11 billion at the end of the second quarter compared with $1.12 billion at the end of the prior quarter.
Long-term debt was $2.19 billion in the reported quarter, up from $2.18 billion in the prior quarter.
Guidance
For third-quarter 2023, management expects sales growth in the mid-single digits from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for third-quarter sales is pegged at $1.68 billion.
AMETEK expects adjusted earnings of $1.56-$1.58 per share, suggesting growth of 8-9% from the year-ago quarter’s reported number. The consensus mark for the same is pinned at $1.53 per share.
For 2023, AME expects sales growth in the mid- to high-single digits from the 2022 level. The Zacks Consensus Estimate for 2023 sales is pegged at $6.65 billion.
Further, management raised the guidance for adjusted earnings from $5.96-$6.10 to $6.18-$6.26, suggesting growth of 9-10% from the 2022 reported level. The Zacks Consensus Estimate for earnings is pegged at $6.12 per share.
Zacks Rank & Stocks to Consider
AMETEK currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector are Salesforce (CRM - Free Report) , AvidXchange (AVDX - Free Report) and Akamai Technologies (AKAM - Free Report) . All three stocks carry a Zacks Rank #2.
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AMETEK's (AME) Q2 Earnings & Sales Surpass Estimates, Up Y/Y
AMETEK, Inc. (AME - Free Report) reported second-quarter 2023 adjusted earnings of $1.57 per share, beating the Zacks Consensus Estimate by 3.3%. The bottom line rose 14% on a year-over-year basis.
Net sales of $1.65 billion came in ahead of the Zacks Consensus Estimate of $1.64 billion. The top line rose 9% year over year.
Top-line growth was driven by solid momentum across the Electronic Instruments Group (EIG) and Electromechanical Group (EMG) segments.
AMETEK’s proper execution of the four core growth strategies, including operational excellence, global market expansion, investments in product development and acquisitions, is expected to continue aiding financial growth in the near and long term. The AMETEK Growth Model is likely to continue driving AME’s business performance.
AMETEK, Inc. Price, Consensus and EPS Surprise
AMETEK, Inc. price-consensus-eps-surprise-chart | AMETEK, Inc. Quote
Segments in Detail
EIG (68.9% of total sales): AMETEK generated sales of $1.135 billion from the segment, reflecting growth of 10% from the year-ago quarter’s level. The figure topped the consensus mark of $1.131 billion.
EMG (31.1% of sales): The segment generated $511.5 million in sales in the second quarter, which improved by 5% on a year-over-year basis. The figure came below the Zacks Consensus Estimate of $520 million.
Operating Details
For the second quarter, operating expenses were $1.23 billion, up 6.7% year over year. The figure contracted by 130 basis points (bps) from the year-ago quarter’s level as a percentage of net sales to 74.6%.
Consequently, the operating margin was 25.4%, which expanded 130 bps from the year-ago quarter’s figure.
The operating margin for EIG expanded 130 bps year over year to 27.1% and that of EMG contracted 100 bps from the year-ago quarter’s level to 26.6%.
Balance Sheet
As of Jun 30, 2023, cash and cash equivalents were $605.6 million, up from $399.9 million as of Mar 31, 2023.
Inventories amounted to $1.11 billion at the end of the second quarter compared with $1.12 billion at the end of the prior quarter.
Long-term debt was $2.19 billion in the reported quarter, up from $2.18 billion in the prior quarter.
Guidance
For third-quarter 2023, management expects sales growth in the mid-single digits from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for third-quarter sales is pegged at $1.68 billion.
AMETEK expects adjusted earnings of $1.56-$1.58 per share, suggesting growth of 8-9% from the year-ago quarter’s reported number. The consensus mark for the same is pinned at $1.53 per share.
For 2023, AME expects sales growth in the mid- to high-single digits from the 2022 level. The Zacks Consensus Estimate for 2023 sales is pegged at $6.65 billion.
Further, management raised the guidance for adjusted earnings from $5.96-$6.10 to $6.18-$6.26, suggesting growth of 9-10% from the 2022 reported level. The Zacks Consensus Estimate for earnings is pegged at $6.12 per share.
Zacks Rank & Stocks to Consider
AMETEK currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector are Salesforce (CRM - Free Report) , AvidXchange (AVDX - Free Report) and Akamai Technologies (AKAM - Free Report) . All three stocks carry a Zacks Rank #2.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Salesforce shares have gained 70.7% in the year-to-date period. The long-term earnings growth rate for CRM is currently projected at 19.25%.
AvidXchange shares have increased 21.1% in the year-to-date period. The long-term earnings growth rate for AVDX is currently projected at 22.90%.
Akamai shares have gained 9.5% in the year-to-date period. The long-term earnings growth rate for AKAM is currently projected at 10%.