AMETEK Announces Third Quarter Results

Rhea-AI Summary

AMETEK (NYSE: AME) reported strong Q3 2024 results with sales of $1.71 billion, up 5% year-over-year. Operating income increased 2% to $445.9 million with margins at 26.1%. Operating cash flow grew 3% to $487.2 million. Adjusted earnings were $1.66 per diluted share, up 1% from Q3 2023. The Electronic Instruments Group maintained sales at $1.13 billion with improved margins, while the Electromechanical Group saw 18% sales growth to $574.0 million. The company raised its 2024 guidance, now expecting adjusted EPS of $6.77-$6.82, representing 6-7% growth.

Positive

• Sales increased 5% YoY to $1.71 billion
• Operating income grew 2% to $445.9 million
• Strong operating cash flow of $487.2 million, up 3%
• EMG segment sales increased 18%
• Raised full-year 2024 EPS guidance to $6.77-$6.82
• Free cash flow to net income conversion of 135%

Negative

• EIG segment sales remained flat year-over-year
• EMG operating margins declined compared to prior year
• Adjusted EPS growth to 1% YoY

Insights

Financial Analyst

AMETEK delivered a solid Q3 with $1.71 billion in sales, representing a 5% YoY growth. The company's operational efficiency remains impressive with operating margins at 26.1% and strong cash flow conversion at 135%. Key highlights include:

• EIG segment maintained high margins at 29.9%, showing a 40bps improvement
• EMG segment demonstrated robust growth with 18% sales increase
• Guidance upgrade for FY2024 EPS to $6.77-$6.82 indicates management's confidence

The company's ability to expand margins despite macro uncertainties demonstrates strong pricing power and operational execution. The double-digit order growth and improved guidance suggest momentum heading into Q4, though EIG's flat sales warrant monitoring.

Market Research Analyst

The acquisition of Virtek Vision strategically strengthens AMETEK's metrology portfolio, while the company's diversified exposure across multiple end markets provides resilience. The 18% growth in EMG segment signals strong industrial demand, offsetting slower growth in electronic instruments. Management's guidance raise for Q4 ($1.81-$1.86 EPS) suggests confidence in near-term execution despite macro uncertainties. The robust free cash flow generation provides flexibility for future M&A and organic growth investments, supporting AMETEK's proven growth model.

BERWYN, Pa., Oct. 31, 2024 /PRNewswire/ -- AMETEK, Inc. (NYSE: AME) today announced its financial results for the third quarter ended September 30, 2024. 

AMETEK's third quarter 2024 sales were $1.71 billion, a 5% increase over the third quarter of 2023. Operating income increased 2% to $445.9 million and operating margins were 26.1% in the quarter. Operating cash flow in the quarter was $487.2 million, up 3% versus the prior year, with free cash flow to net income conversion of 135%.

On a GAAP basis, third quarter earnings per diluted share were $1.47. Adjusted earnings in the quarter were $1.66 per diluted share, up 1% from the third quarter of 2023. Adjusted earnings adds back non-cash, after-tax, acquisition-related intangible amortization of $0.20 per diluted share. A reconciliation of reported GAAP results to adjusted results is included in the financial tables accompanying this release and on the AMETEK website.

"AMETEK delivered excellent results in the third quarter with double digit orders growth, outstanding operating performance, excellent cash flow conversion, and earnings ahead of expectations," stated David A. Zapico, AMETEK Chairman and Chief Executive Officer. "Our businesses are doing an outstanding job managing through short-term macro uncertainties while ensuring we are positioning our businesses for long-term growth across our attractive markets. Additionally, we are pleased to announce the acquisition of Virtek Vision, an outstanding fit with our advanced metrology instrumentation businesses."

Electronic Instruments Group (EIG)
EIG sales in the third quarter were $1.13 billion, in line with the third quarter of 2023. EIG's operating income in the quarter increased 1% to $339.0 million with operating income margins of 29.9%, an increase of 40 basis points compared to the third quarter of 2023.

"We are pleased with EIG's solid third quarter performance, as they continue to deliver excellent operating results and robust margins," stated Mr. Zapico. "EIG remains well positioned to benefit from continued strong investments across their key end markets."

Electromechanical Group (EMG)
EMG sales in the third quarter were $574.0 million, up 18% from the third quarter of 2023. EMG's third quarter operating income was $131.5 million, up 3% versus the prior year, while operating income margins were 22.9% in the quarter. 

"EMG delivered solid results in the third quarter with double-digit organic orders growth and 170 basis points of sequential margin improvement," noted Mr. Zapico. "EMG continues to execute well and remains well-positioned in its core markets."

2024 Outlook 
"AMETEK's results in the third quarter were above expectations, highlighting the strength of the AMETEK Growth Model and our proven ability to navigate through uncertain market conditions," stated Mr. Zapico. "We have an outstanding portfolio of highly differentiated businesses and remain confident in our strategy and long-term growth prospects."

"For 2024, we continue to expect overall sales to be up between 5% and 7% compared to 2023. Adjusted diluted earnings per share are now expected to be in the range of $6.77 to $6.82, up 6% to 7% versus the prior year. This is an increase from our previous guidance range of $6.70 to $6.80 per diluted share," he added.   

"For the fourth quarter of 2024, overall sales are expected to be up mid-single digits on a percentage basis compared to the same period last year. Adjusted earnings in the quarter are anticipated to be in the range of $1.81 to $1.86, up 8% to 11% compared to the fourth quarter of 2023," concluded Mr. Zapico.

Conference Call
AMETEK will webcast its third quarter 2024 investor conference call on Thursday, October 31, 2024, beginning at 8:30 AM ET. The live audio webcast will be available and later archived in the Investors section of www.ametek.com.

About AMETEK
AMETEK (NYSE: AME) is a leading global provider of industrial technology solutions serving a diverse set of attractive niche markets with annual sales of approximately $7.0 billion. The AMETEK Growth Model integrates the Four Growth Strategies - Operational Excellence, New Product Development, Global and Market Expansion, and Strategic Acquisitions - with a disciplined focus on cash generation and capital deployment. AMETEK's objective is double-digit percentage growth in earnings per share over the business cycle and a superior return on total capital. Founded in 1930, AMETEK has been listed on the NYSE for over 90 years and is a component of the S&P 500. For more information, visit www.ametek.com.

Forward-looking Information
Statements in this news release relating to future events, such as AMETEK's expected business and financial performance are "forward-looking statements." Forward-looking statements are subject to various factors and uncertainties that may cause actual results to differ significantly from expectations. These factors and uncertainties include risks related to AMETEK's ability to consummate and successfully integrate future acquisitions; risks with international sales and operations, including supply chain disruptions; AMETEK's ability to successfully develop new products, open new facilities or transfer product lines; the price and availability of raw materials; compliance with government regulations, including environmental regulations; changes in the competitive environment or the effects of competition in our markets; the ability to maintain adequate liquidity and financing sources; and general economic conditions affecting the industries we serve. A detailed discussion of these and other factors that may affect our future results is contained in AMETEK's filings with the U.S. Securities and Exchange Commission, including its most recent reports on Forms 10-K, 10-Q and 8-K. AMETEK disclaims any intention or obligation to update or revise any forward-looking statements.

Contact:
Kevin Coleman
Vice President, Investor Relations and Treasurer
kevin.coleman@ametek.com
Phone: 610.889.5247

AMETEK, Inc. Consolidated Statement of Income (In thousands, except per share amounts) (Unaudited)
	Three Months Ended  September 30,				Nine Months Ended  September 30,
	2024		2023		2024		2023
Net sales	$      1,708,564		$      1,622,837		$      5,179,578		$      4,866,065
Cost of sales	1,092,754		1,020,920		3,347,860		3,096,635
Selling, general and administrative	169,959		163,782		521,137		506,963
Total operating expenses	1,262,713		1,184,702		3,868,997		3,603,598
Operating income	445,851		438,135		1,310,581		1,262,467
Interest expense	(25,118)		(18,386)		(90,962)		(57,678)
Other (expense) income, net	(1,888)		(6,256)		(2,435)		(15,313)
Income before income taxes	418,845		413,493		1,217,184		1,189,476
Provision for income taxes	78,604		73,123		228,317		219,152
Net income	$         340,241		$         340,370		$         988,867		$         970,324
Diluted earnings per share	$               1.47		$               1.47		$               4.26		$               4.19
Basic earnings per share	$               1.47		$               1.48		$               4.28		$               4.21
Weighted average common shares outstanding:
Diluted shares	232,224		231,751		232,188		231,414
Basic shares	231,342		230,691		231,292		230,431
Dividends per share	$               0.28		$               0.25		$               0.84		$               0.75

 

AMETEK, Inc. Information by Business Segment (In thousands) (Unaudited)
	Three Months Ended  September 30,				Nine Months Ended  September 30,
	2024		2023		2024		2023
Net sales:
Electronic Instruments	$      1,134,588		$      1,136,130		$      3,444,980		$      3,388,023
Electromechanical	573,976		486,707		1,734,598		1,478,042
Consolidated net sales	$      1,708,564		$      1,622,837		$      5,179,578		$      4,866,065
Operating income:
Segment operating income:
Electronic Instruments	$         338,963		$         335,171		$      1,041,760		$         951,970
Electromechanical	131,519		127,534		345,312		384,253
Total segment operating income	470,482		462,705		1,387,072		1,336,223
Corporate administrative expenses	(24,631)		(24,570)		(76,491)		(73,756)
Consolidated operating income	$         445,851		$         438,135		$      1,310,581		$      1,262,467

 

AMETEK, Inc. Condensed Consolidated Balance Sheet (In thousands)
	September 30,		December 31,
	2024		2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$         396,266		$         409,804
Receivables, net	968,240		1,012,932
Inventories, net	1,084,622		1,132,471
Other current assets	284,562		269,461
Total current assets	2,733,690		2,824,668
Property, plant and equipment, net	822,609		891,293
Right of use asset, net	211,381		229,723
Goodwill	6,550,267		6,447,629
Other intangibles, investments and other assets	4,449,692		4,630,220
Total assets	$    14,767,639		$    15,023,533
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current portion of long-term debt, net	$         571,061		$      1,417,915
Accounts payable and accruals	1,395,864		1,464,658
Total current liabilities	1,966,925		2,882,573
Long-term debt, net	1,765,473		1,895,432
Deferred income taxes and other long-term liabilities	1,485,018		1,515,337
Stockholders' equity	9,550,223		8,730,191
Total liabilities and stockholders' equity	$    14,767,639		$    15,023,533

 

AMETEK, Inc. Reconciliations of GAAP to Non-GAAP Financial Measures (In thousands, except per share amounts) (Unaudited)
	Three Months Ended
	September 30,
	2024		2023
Diluted earnings per share (GAAP)	$            1.47		$            1.47
Pretax amortization of acquisition-related intangible assets	0.26		0.22
Income tax benefit on amortization of acquisition-related intangible assets	(0.06)		(0.05)
Rounding	(0.01)		—
Adjusted Diluted earnings per share (Non-GAAP)	$            1.66		$            1.64
Cash provided by operating activities (GAAP)	$      487,170		$      472,856
Deduct:  Capital expenditures	(26,282)		(28,671)
Free cash flow (Non-GAAP)	$      460,888		$      444,185
Free Cash Flow Conversion (Free cash flow divided by net income)	135 %		131 %

 

	Forecasted Diluted Earnings Per Share
	Three Months Ended				Year Ended
	December 31, 2024				December 31, 2024
	Low		High		Low		High
Diluted earnings per share (GAAP)	$             1.61		$             1.66		$             5.86		$             5.91
Paragon integration costs	—		—		0.13		0.13
Income tax benefit on Paragon integration costs	—		—		(0.03)		(0.03)
Pretax amortization of acquisition-related intangible assets	0.27		0.27		1.07		1.07
Income tax benefit on amortization of acquisition-related intangible assets	(0.07)		(0.07)		(0.26)		(0.26)
Adjusted Diluted earnings per share (Non-GAAP)	$             1.81		$             1.86		$             6.77		$             6.82

 

Use of Non-GAAP Financial Information

The Company supplements its consolidated financial statements presented on a U.S. generally accepted accounting principles ("GAAP") basis with certain non-GAAP financial information to provide investors with greater insight, increased transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making.  Reconciliation of non-GAAP measures to their most directly comparable GAAP measures are included in the accompanying financial tables. These non-GAAP financial measures should be considered in addition to, and not as a replacement for, or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported by other companies.

The Company believes that these measures provide useful information to investors by reflecting additional ways of viewing AMETEK's operations that, when reconciled to the comparable GAAP measure, helps our investors to better understand the long-term profitability trends of our business, and facilitates easier comparisons of our profitability to prior and future periods and to our peers.

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SOURCE AMETEK, Inc.

FAQ

What was AMETEK's (AME) Q3 2024 revenue?

AMETEK reported Q3 2024 sales of $1.71 billion, representing a 5% increase compared to Q3 2023.

What is AMETEK's (AME) updated EPS guidance for 2024?

AMETEK raised its 2024 adjusted EPS guidance to $6.77-$6.82, representing 6-7% growth compared to 2023.

How did AMETEK's (AME) Electronic Instruments Group perform in Q3 2024?

EIG sales were $1.13 billion, flat compared to Q3 2023, with operating income up 1% and margins improving by 40 basis points to 29.9%.

What was AMETEK's (AME) Q3 2024 operating cash flow?

Operating cash flow in Q3 2024 was $487.2 million, increasing 3% compared to the prior year.