AMETEK reported record third-quarter sales and earnings, with growth from its existing businesses and recent acquisitions. The industrial technology company also raised its full-year guidance and completed its acquisition of Indicor Instrumentation during the quarter.
Sales for the three months ended Sept. 30 rose 17% from a year earlier to $2.22 billion. Adjusted earnings reached a record $2.21 per diluted share, up 17%; GAAP earnings were $1.85 per share. The announcement says full-year guidance was raised, but the revised targets are not included in the details provided here.
Key details
- Profit and margins: GAAP operating income was a record $584.9 million. Adjusted operating income increased 20% to a record $594.7 million. The adjusted operating margin was 26.8%, up 60 basis points year over year. AMETEK also cited 110 basis points of core margin expansion.
- Cash generation: Operating cash flow rose 27% to $560.6 million. Free cash flow was a record, and free cash flow equaled 124% of net income.
- Adjusted earnings: The company’s adjusted results exclude acquisition-related intangible amortization and transaction and integration costs, which together reduced quarterly earnings by $0.36 per diluted share after tax.
- Electronic Instruments Group: Sales increased 16% to a record $1.44 billion. GAAP operating income was a record $406.7 million; adjusted operating income rose 15% to a record $414.6 million. The company cited broad-based sales growth, including contributions from acquisitions, and 60 basis points of core margin expansion.
- Electromechanical Group: Sales rose 20% to a record $778.0 million. GAAP operating income reached a record $210.0 million, while adjusted operating income increased 29% to a record $212.0 million. The adjusted operating margin was 27.2%. AMETEK attributed the sales increase to broad-based organic growth and acquisition contributions.
- Indicor acquisition: AMETEK completed its acquisition of Indicor Instrumentation during the quarter. The announcement describes the acquired businesses as differentiated industrial technology companies but does not provide transaction terms.
Plain-English implications
The quarter combined growth in AMETEK’s existing businesses with added sales from acquisitions, while operating income and cash generation also reached records. The Indicor deal adds businesses to AMETEK’s portfolio; the announcement does not specify its purchase price or expected financial contribution.