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AMETEK (AME) Q1 Earnings Beat Estimates, Revenues Fall Y/Y
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AMETEK, Inc. (AME - Free Report) reported first-quarter 2020 adjusted earnings of $1.02 per share, which beat the Zacks Consensus Estimate by 6.3% and came within management’s guidance of $1.01-$1.04. The figure improved 2% from the year-ago quarter and 1.9% sequentially.
Net sales declined 6.6% on a year-over-year basis and 7.9% sequentially to $1.20 billion. Further, the top line missed the Zacks Consensus Estimate of $1.23 billion.
Disruptions caused by rapidly spreading COVID-19 led to declined in the company’s top line. The coronavirus pandemic affected both Electronic Instruments Group (EIG) and Electromechanical Group (EMG) segments during the reported quarter.
The company had withdrawn full-year guidance in its recently released business update and has refrained from providing further updates owing to coronavirus-induced uncertainties in the demand environment.
Nevertheless, the company’s proper execution of the four core growth strategies of operational excellence, global market expansion, investments in product development and acquisitions are expected to continue aiding financial growth in the near term as well as the long haul. Moreover, the AMETEK Growth Model is likely to continue driving the company’s business performance.
Segments in Detail
EIG (64.4% of total sales): The company generated $774.2 million of sales from this segment, reflecting a decline of 4% from the year-ago quarter. This can primarily be attributed to the coronavirus pandemic. Nevertheless, benefits from acquisitions of Rauland, Mocon, Telular and Gatan remained positive during the reported quarter.
EMG (35.6% of sales): This segment generated $427.9 million of sales in the first quarter, which decreased 11% on a year-over-year basis. Coronavirus-induced headwinds were major negatives. Nevertheless, the company witnessed strong operational performance within the segment.
For the first quarter, operating expenses were $970.2 billion, down 3.4% year over year. However, the figure expanded 270 basis points (bps) from the year-ago quarter as a percentage of net sales.
Consequently, operating margin was 19.3%, which contracted 260 bps from the year-ago reported figure.
Segment wise, operating margins for EIG and EMG were 22.1% and 17.9%, contracting 310 bps and 260 bps, respectively, on a year-over-year basis.
Balance Sheet
As of Mar 31, 2020, cash and cash equivalents were $1.25 billion, significantly up from $393.03 million as of Dec 31, 2019.
Further, inventories amounted to $654.3 million at the end of the first quarter compared with $624.6 million at the end of the prior quarter.
Long-term debt was $2.7 billion in the reported quarter, up from $2.3 billion in the prior quarter.
Long-term earnings growth rate for both Netlist and InterDigital is pegged at 15%, while the same for Pixelworks is 20%.
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AMETEK (AME) Q1 Earnings Beat Estimates, Revenues Fall Y/Y
AMETEK, Inc. (AME - Free Report) reported first-quarter 2020 adjusted earnings of $1.02 per share, which beat the Zacks Consensus Estimate by 6.3% and came within management’s guidance of $1.01-$1.04. The figure improved 2% from the year-ago quarter and 1.9% sequentially.
Net sales declined 6.6% on a year-over-year basis and 7.9% sequentially to $1.20 billion. Further, the top line missed the Zacks Consensus Estimate of $1.23 billion.
Disruptions caused by rapidly spreading COVID-19 led to declined in the company’s top line. The coronavirus pandemic affected both Electronic Instruments Group (EIG) and Electromechanical Group (EMG) segments during the reported quarter.
The company had withdrawn full-year guidance in its recently released business update and has refrained from providing further updates owing to coronavirus-induced uncertainties in the demand environment.
Nevertheless, the company’s proper execution of the four core growth strategies of operational excellence, global market expansion, investments in product development and acquisitions are expected to continue aiding financial growth in the near term as well as the long haul. Moreover, the AMETEK Growth Model is likely to continue driving the company’s business performance.
Segments in Detail
EIG (64.4% of total sales): The company generated $774.2 million of sales from this segment, reflecting a decline of 4% from the year-ago quarter. This can primarily be attributed to the coronavirus pandemic. Nevertheless, benefits from acquisitions of Rauland, Mocon, Telular and Gatan remained positive during the reported quarter.
EMG (35.6% of sales): This segment generated $427.9 million of sales in the first quarter, which decreased 11% on a year-over-year basis. Coronavirus-induced headwinds were major negatives. Nevertheless, the company witnessed strong operational performance within the segment.
AMETEK, Inc. Price, Consensus and EPS Surprise
AMETEK, Inc. price-consensus-eps-surprise-chart | AMETEK, Inc. Quote
Operating Details
For the first quarter, operating expenses were $970.2 billion, down 3.4% year over year. However, the figure expanded 270 basis points (bps) from the year-ago quarter as a percentage of net sales.
Consequently, operating margin was 19.3%, which contracted 260 bps from the year-ago reported figure.
Segment wise, operating margins for EIG and EMG were 22.1% and 17.9%, contracting 310 bps and 260 bps, respectively, on a year-over-year basis.
Balance Sheet
As of Mar 31, 2020, cash and cash equivalents were $1.25 billion, significantly up from $393.03 million as of Dec 31, 2019.
Further, inventories amounted to $654.3 million at the end of the first quarter compared with $624.6 million at the end of the prior quarter.
Long-term debt was $2.7 billion in the reported quarter, up from $2.3 billion in the prior quarter.
Zacks Rank & Key Picks
AMETEK currently has a Zacks Rank #3 (Hold).
Netlist, Inc. (NLST - Free Report) , Pixelworks, Inc. (PXLW - Free Report) and InterDigital, Inc. (IDCC - Free Report) are some better-ranked stocks worth considering in the broader computer and technology sector, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for both Netlist and InterDigital is pegged at 15%, while the same for Pixelworks is 20%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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