AMETEK, Inc. has reported second-quarter 2024 adjusted earnings of $1.66 per share, surpassing the Zacks Consensus Estimate by 1.2%. This increase marks a 6% rise from the previous year.
Net sales for the quarter reached $1.73 billion, reflecting a 5% surge compared to the same period last year. Despite the growth, this figure fell short of the Zacks Consensus Estimate of $1.77 billion.
The stellar performance of the Electromechanical Group (EMG) segment played a crucial role in driving the top-line growth. Additionally, the Electronic Instruments Group (EIG) segment exhibited notable contributions.
AMETEK has continued to excel by rigorously adhering to its four core growth strategies, paving the way for operational excellence, global market expansion, product development investments, and strategic acquisitions, all of which have culminated in a flourishing financial trajectory.
Despite these commendable achievements, concerns loom as the company braces itself for the repercussions of ongoing inventory normalization within its OEM customer base. The increased caution among customers is leading to temporary delays in project expenditure.
AMETEK, Inc. Price, Consensus and EPS Surprise
Graphically corroborating AMETEK’s impressive performance is indicative of the company’s resilience and growth trajectory, albeit slightly missing certain estimates.
Segments in Detail
The Electronic Instruments Group (EIG) segment recorded sales of $1.15 billion, showcasing a 2% year-over-year growth but slightly missing the consensus projection.
Conversely, the Electromechanical Group (EMG) segment witnessed a substantial improvement, amassing $581.2 million in sales, marking a 14% growth from the previous year. However, this figure fell short of the Zacks Consensus Estimate of $604 million.
Operating Details
Operating expenses for the quarter amounted to $1.3 billion, representing a 4.9% increase year over year. The operating margin saw a 40 bps contraction from the previous year, amounting to 25.8%.
The operating margin for EIG expanded by 320 bps to 30.3%, while for EMG, it contracted by 540 bps to 21.2% owing to the normalization of inventory levels within the company’s OEM customer base.
Balance Sheet
As of June 30, 2024, AMETEK boasted cash and cash equivalents amounting to $396.6 million, up from $373.8 million as of March 31, 2024.
Meanwhile, its long-term debt stood at $1.82 billion as of March 31, 2024, down from $1.88 billion reported as of March 31, 2024.
Guidance
For the third quarter of 2024, management anticipates sales growth in the mid-single digits compared to the year-ago period’s figure. The adjusted earnings are projected to range from $1.60 to $1.62 per share.
Looking ahead to full-year 2024, AME expects sales growth ranging from 5% to 7% over the previous year with adjusted earnings projected to be between $6.70 and $6.80 per share.
Zacks Rank & Stocks to Consider
AMETEK currently holds a Zacks Rank #3 (Hold). Alternative stocks such as Badger Meter (BMI), Arista Networks (ANET), and Apple (AAPL) present promising investment opportunities with higher Zacks Ranks.
Badger Meter has shown robust gains in the year-to-date period, affirming its strong potential for investors. Arista Networks and Apple have also demonstrated positive growth trends, making them appealing picks in the technology sector.
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