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AMETEK, Inc. (AME - Free Report) has reported second-quarter 2024 adjusted earnings of $1.66 per share, beating the Zacks Consensus Estimate by 1.2%. The bottom line rose 6% on a year-over-year basis.
Net sales of $1.73 billion increased 5% from the year-ago quarter. However, the figure missed the Zacks Consensus Estimate of $1.77 billion.
Top-line growth was primarily driven by the solid performance of the Electromechanical Group (EMG) segment. Also, strength in the Electronic Instruments Group (EIG) segment contributed well.
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 aiding financial growth. Strength in the AMETEK Growth model is a positive.
However, AME expects the ongoing inventory normalization within its OEM customer base to be concerning in the second half of 2024. The fact that customers are turning more cautious is a headwind as it is leading to short-term delays in project spending.
EIG (66.5% of Total Sales): AMETEK generated sales of $1.15 billion from the segment, reflecting year-over-year growth of 2%. The figure missed the consensus mark of $1.17 billion.
EMG (33.5%): The segment generated $581.2 million in sales in the second quarter, which improved 14% on a year-over-year basis. The figure lagged the Zacks Consensus Estimate of $604 million.
Operating Details
For the second quarter, operating expenses were $1.3 billion, up 4.9% year over year. The figure contracted 40 basis points (bps) from the year-ago quarter as a percentage of net sales to 74.2%.
The operating margin was 25.8%, which expanded 40 bps from the year-ago quarter.
The operating margin for EIG expanded 320 bps year over year to 30.3%. The same for EMG contracted 540 bps from the year-ago quarter to 21.2% due to the normalization of inventory levels across the company’s OEM customer base.
Balance Sheet
As of Jun 30, 2024, cash and cash equivalents were $396.6 million, up from $373.8 million as of Mar 31, 2024.
The long-term debt was $1.82 billion as of Mar 31, 2024, down from $1.88 billion as of Mar 31, 2024.
Guidance
For third-quarter 2024, management expects sales growth in the mid-single digits from the year-ago quarter’s reported figure. The Zacks Consensus Estimate is pegged at $1.81 billion.
AMETEK expects adjusted earnings of $1.60-$1.62 per share, suggesting a decline of 1-2% from the year-ago quarter’s reported number. The consensus mark is pinned at $1.73 per share.
For 2024, AME expects sales growth between 5% and 7% from the 2023 reported level. The Zacks Consensus Estimate is pegged at $7.24 billion.
The company reduced its guidance for adjusted earnings per share from $6.74-$6.86 to $6.70-$6.80, suggesting growth of 5-7% from the 2023 reported level. The Zacks Consensus Estimate for earnings is pegged at $6.81 per share.
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AMETEK (AME) Q2 Earnings Surpass Estimates, Sales Rise Y/Y
AMETEK, Inc. (AME - Free Report) has reported second-quarter 2024 adjusted earnings of $1.66 per share, beating the Zacks Consensus Estimate by 1.2%. The bottom line rose 6% on a year-over-year basis.
Net sales of $1.73 billion increased 5% from the year-ago quarter. However, the figure missed the Zacks Consensus Estimate of $1.77 billion.
Top-line growth was primarily driven by the solid performance of the Electromechanical Group (EMG) segment. Also, strength in the Electronic Instruments Group (EIG) segment contributed well.
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 aiding financial growth. Strength in the AMETEK Growth model is a positive.
However, AME expects the ongoing inventory normalization within its OEM customer base to be concerning in the second half of 2024. The fact that customers are turning more cautious is a headwind as it is leading to short-term delays in project spending.
AMETEK, Inc. Price, Consensus and EPS Surprise
AMETEK, Inc. price-consensus-eps-surprise-chart | AMETEK, Inc. Quote
Segments in Detail
EIG (66.5% of Total Sales): AMETEK generated sales of $1.15 billion from the segment, reflecting year-over-year growth of 2%. The figure missed the consensus mark of $1.17 billion.
EMG (33.5%): The segment generated $581.2 million in sales in the second quarter, which improved 14% on a year-over-year basis. The figure lagged the Zacks Consensus Estimate of $604 million.
Operating Details
For the second quarter, operating expenses were $1.3 billion, up 4.9% year over year. The figure contracted 40 basis points (bps) from the year-ago quarter as a percentage of net sales to 74.2%.
The operating margin was 25.8%, which expanded 40 bps from the year-ago quarter.
The operating margin for EIG expanded 320 bps year over year to 30.3%. The same for EMG contracted 540 bps from the year-ago quarter to 21.2% due to the normalization of inventory levels across the company’s OEM customer base.
Balance Sheet
As of Jun 30, 2024, cash and cash equivalents were $396.6 million, up from $373.8 million as of Mar 31, 2024.
The long-term debt was $1.82 billion as of Mar 31, 2024, down from $1.88 billion as of Mar 31, 2024.
Guidance
For third-quarter 2024, management expects sales growth in the mid-single digits from the year-ago quarter’s reported figure. The Zacks Consensus Estimate is pegged at $1.81 billion.
AMETEK expects adjusted earnings of $1.60-$1.62 per share, suggesting a decline of 1-2% from the year-ago quarter’s reported number. The consensus mark is pinned at $1.73 per share.
For 2024, AME expects sales growth between 5% and 7% from the 2023 reported level. The Zacks Consensus Estimate is pegged at $7.24 billion.
The company reduced its guidance for adjusted earnings per share from $6.74-$6.86 to $6.70-$6.80, suggesting growth of 5-7% from the 2023 reported level. The Zacks Consensus Estimate for earnings is pegged at $6.81 per share.
Zacks Rank & Stocks to Consider
AMETEK currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Badger Meter (BMI - Free Report) , Arista Networks (ANET - Free Report) and Apple (AAPL - Free Report) . Badger Meter sports a Zacks Rank #1 (Strong Buy) at present, and Arista Networks and Apple carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Badger Meter shares have gained 32.7% in the year-to-date period. The long-term earnings growth rate for BMI is projected at 17.92%.
Arista Networks shares have gained 41.5% in the year-to-date period. The long-term earnings growth rate for ANET is expected to be 16.07%.
Apple shares have gained 19% in the year-to-date period. The long-term earnings growth rate for AAPL is anticipated to be 12.71%.