Participants: David A. Zapico, Chairman of the Board & CEO; AMETEK, Inc.; Kevin C. Coleman, VP of IR & Treasurer; AMETEK, Inc.; William Joseph Burke, Executive VP & CFO; AMETEK, Inc.; Allison Ann Marie Poliniak-Cusic, Director & Senior Equity Analyst; Wells Fargo Securities, LLC, Research Division; Christopher D. Glynn, MD & Senior Analyst; Oppenheimer & Co. Inc., Research Division; David Emerson Ridley-Lane, VP; BofA Securities, Research Division; Deane Michael Dray, MD of Multi-Industry & Electrical Equipment & Analyst; RBC Capital Markets, Research Division; Jeffrey Todd Sprague, Founder & Managing Partner; Vertical Research Partners, LLC; Matt J. Summerville, MD & Senior Research Analyst; D.A. Davidson & Co., Research Division; Michael Anastasiou, Associate; TD Cowen, Research Division; Nigel Edward Coe, MD & Senior Research Analyst; Wolfe Research, LLC; Peter James Costa, Associate; Mizuho Securities USA LLC, Research Division; Scott Graham, Senior Analyst; Seaport Research Partners.
Introduction
AMETEK Inc. delivered impressive results in its third quarter of 2023, showcasing exceptional operational execution, margin expansion, strong cash flows, and earnings that surpassed expectations. This success can be attributed to the company’s strategic acquisitions, notably the recent addition of United Electronic Industries and Amplifier Research, as well as the announcement of the definitive purchase agreement to acquire Paragon Medical. These acquisitions will further strengthen AMETEK’s position in the market, particularly in the medical technology sector.
Key Highlights
During the third quarter, AMETEK achieved record-breaking performance, setting new highs for operating income, operating margins, earnings per share, EBITDA, and cash flows. The company’s third quarter sales reached $1.62 billion, representing a 5% increase compared to the same period in 2022. Organic sales growth remained flat, while acquisitions contributed 4 points and foreign currency added 1 point to the overall growth. The company’s backlog stood at $3.4 billion, near record levels, showcasing the strength of AMETEK’s order pipeline.
Operational Performance
AMETEK’s operating performance in the third quarter was exceptional. The Electronic Instruments Group (EIG) delivered impressive results with sales of $1.14 billion, an 8% increase compared to the previous year. EIG’s organic sales growth remained broad-based, driven by strong performance in the Aerospace & Defense businesses and the Zygo, SPECTRO, and CAMECA businesses.
In contrast, the Electromechanical Group (EMG) faced challenges due to the normalization of inventory levels among OEM customers. EMG’s third quarter sales were $487 million, a 2% decrease compared to the same period in the previous year. However, the group still demonstrated solid operating performance, with operating margins at 26.2%.
Outlook and Future Growth
Based on the strong results and positive outlook for the remainder of the year, AMETEK has increased its earnings guidance for the full year. The company’s unique growth model, which revolves around differentiated businesses aligned with diverse and attractive markets, positions AMETEK for long-term sustainable growth. The continued focus on organic growth initiatives will further enhance the company’s performance in the future.
FAQ
Q: What were AMETEK’s third quarter sales?
A: AMETEK’s third quarter sales reached $1.62 billion, representing a 5% increase compared to the same period in 2022.
Q: What contributed to AMETEK’s sales growth in the third quarter?
A: The company’s sales growth in the third quarter was mainly driven by acquisitions, which added 4 points, with organic growth remaining flat. Foreign currency also contributed 1 point to the overall growth.
Q: What acquisitions did AMETEK make during the third quarter?
A: During the third quarter, AMETEK completed the acquisition of United Electronic Industries and subsequently acquired Amplifier Research. Additionally, the company announced the signing of a definitive purchase agreement to acquire Paragon Medical.
Q: How did AMETEK’s electronic instruments group perform in the third quarter?
A: The Electronic Instruments Group (EIG) delivered impressive operating performance, with sales of $1.14 billion, an 8% increase compared to the previous year. The group’s organic sales growth remained broad-based and reflected the strong performance in the Aerospace & Defense businesses and the Zygo, SPECTRO, and CAMECA businesses.
Q: What challenges did the electromechanical group face in the third quarter?
A: The Electromechanical Group (EMG) faced challenges due to the normalization of inventory levels among original equipment manufacturer (OEM) customers. EMG’s third quarter sales were $487 million, a 2% decrease compared to the same period in the previous year. However, the group demonstrated solid operating performance, with operating margins at 26.2%.