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AMETEK (AME) to Report Q1 Earnings: What's in the Offing?

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AMETEK, Inc. (AME - Free Report) is scheduled to report first-quarter 2020 results on May 5, before the market opens.

The company surpassed the Zacks Consensus Estimate in the trailing four quarters, with the average earnings surprise being 3.7%.

Q1 Expectations

For the first quarter, AMETEK expects sales to be down 6.5% due to the impact of the coronavirus pandemic, which in turn resulted in supply and demand disruptions. The Zacks Consensus Estimate for sales is pegged at $1.20 billion, indicating a decline of 6.4% year over year.

Further, the company expects first-quarter adjusted earnings between $1.01 and $1.03 per share on higher margins. The Zacks Consensus Estimate for earnings is pegged at $1.01 per share, suggesting a 1%year-over-year improvement.

AMETEK, Inc. Price and EPS Surprise

 

Performance in the Last Reported Quarter

In the fourth quarter, AMETEK reported earnings of $1.08 per share. It delivered a positive earnings surprise of 4.9%.

Net sales rose 3% on a year-over-year basis to $1.30 billion. However, revenues missed the Zacks Consensus Estimate of $1.34 billion.

Let’s see how things have shaped up prior to this announcement.

Factors to Note

Due the global coronavirus-driven economic crisis, the company faced supply and demand disruptions, which might have impacted sales in the to-be-reported quarter. However, it has rebounded operations in China, as the coronavirus threat has receded in the country.

The company’s proper execution of core growth strategies — including operational excellence, global market expansion, investments in product development and acquisitions — is expected to have aided its performance in the first quarter. Moreover, the AMETEK Growth Model’s momentum is expected to reflect on first-quarter results.

Growth in research and development spending, and solid engineering initiatives are expected to have driven its organic growth in the soon-to-be-reported quarter.

The company’s focus on strong cash flow generation, including acquisitions and share repurchases, is anticipated to have aided capital deployment activities in the quarter.

Sales in the Electronic Instruments Group segment are expected to have benefited from the acquisitions of Motec, Forza, Telular and Spectro Scientific. Further, strengthening of process businesses — especially the Materials Analysis business — is likely to have contributed to the segment’s top line in the quarter to be reported. Additionally, solid momentum in the Aerospace business is expected to have aided the company’s overall performance.

Sales in the Electromechanical Group segment are likely to have benefited from solid momentum across the engineered materials business. However, foreign currency headwinds and continued slowdown in the Automation business may have affected this segment’s performance.

What Our Model Says

Our proven model predicts an earnings beat for AMETEK this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Currently, AMETEK has an Earnings ESP of +0.20% and a Zacks Rank #3.

Other Stocks to Consider

Here are a few other stocks, which, per our model, also have the right combination of elements to post an earnings beat in the to-be-reported quarter:

Pixelworks, Inc. (PXLW - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Baidu, Inc. (BIDU - Free Report) has an Earnings ESP of +10.27% and a Zacks Rank of 2.

Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +8.17% and a Zacks Rank #2.

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