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AMETEK (AME) to Report Q3 Earnings: What's in the Offing?

Zacks Equity Research

AMETEK, Inc. AME is scheduled to report third-quarter 2019 results on Oct 31.

The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average positive earnings surprise being 3.14%.

Which Way Are Q3 Estimates Treading?

For the third quarter, AMETEK expects year-over-year sales growth in high-single digits. The Zacks Consensus Estimate for sales is pegged at $1.29 billion.

Further, the company expects third-quarter adjusted earnings between $1.00 and $1.02 per share, suggesting growth of 10-12% from the year-ago reported figure. The Zacks Consensus Estimate for earnings is pegged at $1.01.

Past-Quarter Performance

In the second quarter, AMETEK reported earnings of $1.05 per share, with a positive earnings surprise of 1.94%. The figure also grew 14.1% on a year-over-year basis.

Net sales rose 7% on a year-over-year basis and 0.13% sequentially to $1.29 billion. However, revenues missed the Zacks Consensus Estimate of $1.32 billion.

Let’s see how things are shaping up prior to this announcement.

AMETEK, Inc. Price and EPS Surprise

 

AMETEK, Inc. Price and EPS Surprise

AMETEK, Inc. price-eps-surprise | AMETEK, Inc. Quote

Factors to Consider

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

Further, growing research and development spending, and strengthening of engineering initiatives are expected to have driven its organic growth in the soon-to-be-reported quarter.

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

Further, positive contributions from strategic acquisitions are likely to have aided its segmental performance.

Sales for the Electronic Instruments Group (“EIG”) segment are expected to have benefited from acquisitions of Motec, Forza, Telular and Spectro Scientific. Further, the strengthening of process businesses, especially the Materials Analysis business, is likely to have contributed to the segment’s top line in the quarter under review. Additionally, solid momentum in its Aerospace business is expected to have aided the company.
 
Sales for the Electromechanical Group (“EMG”) segment are likely to have benefited from the FMH Aerospace buyout in the to-be-reported quarter. Further, solid momentum across the company’s engineered materials business is expected to have contributed to the top line of the segment in the quarter under review.

However, the imposition of tariffs as a result of the U.S.-China trade war is anticipated to have negatively impacted AMETEK’s third-quarter performance.

What Our Model Says

Our proven model doesn’t conclusively predict 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

AMETEK has an Earnings ESP of 0.00% and a Zacks Rank #3.

Stocks to Consider

Here are a few stocks, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Advanced Energy Industries AEIS has an Earnings ESP of +4.17% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

GlaxoSmithKline plc GSK has an Earnings ESP of +3.03% and a Zacks Rank #2.

TE Connectivity Ltd. TEL has an Earnings ESP of 1.15% and a Zacks Rank #3.

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