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AMETEK (AME) Up 1.9% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for AMETEK, Inc. (AME - Free Report) . Shares have added about 1.9% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
AMETEK Q1 Earnings & Revenues Exceed Expectations
AMETEK’s first-quarter 2017 earnings of 60 cents per share came ahead of the Zacks Consensus Estimate. Earnings were up 3.4% sequentially and 5.3% year over year. Earnings also exceeded the guided range of 55 cents to 57 cents.
Total Revenue
AMETEK reported revenues of $1.01 billion, up 3.6% sequentially and 6.7% year over year. Revenues came ahead of the Zacks Consensus Estimate of $956 million. The company has two operating segments — Electronic Instruments Group (EIG) and Electromechanical Group (EMG) — which accounted for 62% and 38%, respectively of total revenue in the fourth quarter.
Revenues by Segment
Revenues of EIG were up 0.6% sequentially and 8.9% on a year-over-year basis to $619.8 million. The year-over-year increase was due to robust core growth and contribution from the acquisitions of ESP/SurgeX, Brookfield Engineering Laboratories, Nu Instruments, Rauland-Borg and HS Foils. EMG sales were up 8.7% sequentially and 3.3% on a year-over-year basis to $387.9 million. The year- over-year improvement was mainly due to solid core growth across Differentiated and Floorcare businesses and contribution from Laserage acquisition.
Operating Performance
AMETEK’s gross margin for the quarter was 34%, up 402 basis points (bps) from 30% in the preceding quarter but down 189 bps from 35.9% a year ago. The company reported operating income of $220.3 million, higher than the previous quarter’s income of $212.7 million and the year-ago quarter figure of $208.5 million. Operating margin of 21.9% was flat sequentially but down 22 bps year over year.
Net Income
AMETEK’s net income was $138.9 million, or 13.8%, compared with $134.7 million, or 13.8% of sales, in the previous quarter and $134.2 million, or 14.2%, in the year-ago period. Earnings of 60 cents per share were higher than 58 cents in the prior quarter and 57 cents reported in the year-ago quarter.
Balance Sheet
Cash and cash equivalents balance at the end of the first quarter was $570.2 million, down from $717.3 million in the previous quarter. Long-term debt was $2.08 billion, up from $2.06 billion in the previous quarter.
Outlook
For the second quarter, management expects revenues to be up in mid-single digits year over year on a percentage basis. Earnings are expected to be in the range of 60 cents to 62 cents per share.For 2017, management expects revenues to be up in mid-single digits from 2016. Earnings are expected to be in the range of $2.40 to $2.48 per share.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There have been three revisions higher for the current quarter compared to three lower.
At this time, the stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with a 'D'. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for an inline average return from the stock in the next few months.
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AMETEK (AME) Up 1.9% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for AMETEK, Inc. (AME - Free Report) . Shares have added about 1.9% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
AMETEK Q1 Earnings & Revenues Exceed Expectations
AMETEK’s first-quarter 2017 earnings of 60 cents per share came ahead of the Zacks Consensus Estimate. Earnings were up 3.4% sequentially and 5.3% year over year. Earnings also exceeded the guided range of 55 cents to 57 cents.
Total Revenue
AMETEK reported revenues of $1.01 billion, up 3.6% sequentially and 6.7% year over year. Revenues came ahead of the Zacks Consensus Estimate of $956 million. The company has two operating segments — Electronic Instruments Group (EIG) and Electromechanical Group (EMG) — which accounted for 62% and 38%, respectively of total revenue in the fourth quarter.
Revenues by Segment
Revenues of EIG were up 0.6% sequentially and 8.9% on a year-over-year basis to $619.8 million. The year-over-year increase was due to robust core growth and contribution from the acquisitions of ESP/SurgeX, Brookfield Engineering Laboratories, Nu Instruments, Rauland-Borg and HS Foils. EMG sales were up 8.7% sequentially and 3.3% on a year-over-year basis to $387.9 million. The year- over-year improvement was mainly due to solid core growth across Differentiated and Floorcare businesses and contribution from Laserage acquisition.
Operating Performance
AMETEK’s gross margin for the quarter was 34%, up 402 basis points (bps) from 30% in the preceding quarter but down 189 bps from 35.9% a year ago. The company reported operating income of $220.3 million, higher than the previous quarter’s income of $212.7 million and the year-ago quarter figure of $208.5 million. Operating margin of 21.9% was flat sequentially but down 22 bps year over year.
Net Income
AMETEK’s net income was $138.9 million, or 13.8%, compared with $134.7 million, or 13.8% of sales, in the previous quarter and $134.2 million, or 14.2%, in the year-ago period. Earnings of 60 cents per share were higher than 58 cents in the prior quarter and 57 cents reported in the year-ago quarter.
Balance Sheet
Cash and cash equivalents balance at the end of the first quarter was $570.2 million, down from $717.3 million in the previous quarter. Long-term debt was $2.08 billion, up from $2.06 billion in the previous quarter.
Outlook
For the second quarter, management expects revenues to be up in mid-single digits year over year on a percentage basis. Earnings are expected to be in the range of 60 cents to 62 cents per share.For 2017, management expects revenues to be up in mid-single digits from 2016. Earnings are expected to be in the range of $2.40 to $2.48 per share.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There have been three revisions higher for the current quarter compared to three lower.
AMTEK, Inc. Price and Consensus
AMTEK, Inc. Price and Consensus | AMTEK, Inc. Quote
VGM Scores
At this time, the stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with a 'D'. Following the exact same course, the stock was allocated also a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for an inline average return from the stock in the next few months.