AMETEK lifts earnings outlook as sales and operating cash flow rise
AMETEK increased third-quarter sales by 17 per cent, with both its electronic instruments and electromechanical businesses growing. Adjusted earnings surpassed analyst expectations, and operating cash flow rose faster than revenue. The company completed its Indicor Instrumentation acquisition during the quarter and raised its annual adjusted earnings forecast. Acquisition-related expenses leave a gap between its reported and adjusted per-share profit. Its adjusted operating margin reached 26.8 per cent.
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Both operating divisions grow
AMETEK, a maker of electronic instruments and electromechanical equipment, increased third-quarter sales 17 per cent to 2.22 billion dollars. The results cover the three months ended 30 September. Zacks’ assessment of the announcement put both adjusted quarterly earnings and revenue above its consensus estimates. Management said acquisitions and growth in existing operations contributed in both of its business segments.[1], [2]
Electronic Instruments Group sales increased 16 per cent to 1.44 billion dollars. Its reported operating income was 406.7 million dollars and adjusted operating income was 414.6 million dollars. Electromechanical Group sales rose 20 per cent to 778.0 million dollars, with reported operating income of 210.0 million dollars and adjusted operating income of 212.0 million dollars.[1]
Acquisition expenses separate the earnings measures
Reported diluted earnings were 1.85 dollars per share. Adjusted earnings increased 17 per cent to 2.21 dollars per share after excluding 0.36 dollars of after-tax acquisition-related amortization, transaction and integration expenses. Operating income under generally accepted accounting principles was 584.9 million dollars. Adjusted operating income rose 20 per cent to 594.7 million dollars, with its margin up 60 basis points to 26.8 per cent.[1]
Cash flow rises and the annual forecast moves higher
Operating cash flow reached 560.6 million dollars, up 27 per cent from a year earlier. AMETEK reported free cash flow equivalent to 124 per cent of net income under its own calculation. The cash figures accompanied the quarter’s sales and earnings increases, while the Indicor Instrumentation acquisition was completed during the reporting period.[1]
Management raised its full-year adjusted earnings guidance to 8.53–8.57 dollars per share from 8.20–8.30 dollars. It attributed the revision to third-quarter performance, its fourth-quarter view and the expected contribution from Indicor. For the fourth quarter alone it forecast adjusted earnings of 2.26–2.30 dollars per share. These ranges are management’s expectations for the remaining reporting period and the full year.[1]
