Ametek (AME) Tops Q1 EPS by 6c, Revenues Miss

Ametek (NYSE: AME) reported Q1 EPS of $1.02, $0.06 better than the analyst estimate of $0.96. Revenue for the quarter came in at $1.2 billion versus the consensus estimate of $1.23 billion.

"We are pleased with the way our colleagues have responded to the unprecedented personal and professional challenges presented by the COVID-19 pandemic," commented David A. Zapico, AMETEK Chairman and Chief Executive Officer. "The safety and well-being of our employees remains our top priority. To that end, we have implemented significant safety measures to help safeguard our employees while also providing continued support for our essential customers."

"Although first quarter sales were impacted by the spread of COVID-19, our businesses reacted swiftly and our proven operating capability allowed us to expand adjusted operating margins 100 basis points and deliver earnings in-line with expectations," Mr. Zapico continued. "Additionally, AMETEK's operating cash flow in the quarter was excellent at $271 million, up 38% over the first quarter of 2019. This cash generation, along with proceeds from the sale of Reading Alloys, have strengthened AMETEK's already strong balance sheet."

Electronic Instruments Group (EIG)First quarter EIG sales were $774.2 million, down 4% compared to the same period in 2019. On a GAAP basis, EIG's first quarter 2020 operating income was $171.3 million. Excluding realignment costs, first quarter EIG operating income was $194.1 million and operating margins were 25.1% in the quarter.

"While recent acquisitions, including Rauland, Mocon, Telular and Gatan continue to deliver solid performance given the attractive, secular growth opportunities in markets they serve, EIG sales were negatively impacted as the coronavirus spread globally during the quarter. Despite lower than expected sales, our businesses delivered strong operating performance and core margin expansion," noted Mr. Zapico.

Electromechanical Group (EMG)EMG sales in the first quarter were $428.0 million, down 11% compared to last year's first quarter. On a GAAP basis, EMG first quarter operating income was $76.6 million. Excluding realignment costs, EMG's operating income was $97.5 million and operating income margins were a record 22.8%.

"Despite a challenging macro environment due to the spread of the coronavirus, EMG delivered exceptional operating performance in the quarter. By proactively driving Operational Excellence initiatives, EMG achieved impressive operating margins in the quarter," commented Mr. Zapico.

Long-term Outlook"Given the uncertainty related to the timing and magnitude of the COVID-19 pandemic, we previously withdrew our full year financial guidance provided on February 5, 2020," noted Mr. Zapico. "We will provide forward guidance when visibility improves."

"While these are historically uncertain times, we remain focused on delivering long-term, sustainable success for our shareholders, colleagues, customers and suppliers, and the communities where we operate. The AMETEK Growth Model is adaptable and provides our businesses with the tools needed to successfully navigate uncharted economic environments," noted Mr. Zapico.

"We are well positioned to manage this challenge with a portfolio of outstanding businesses that provide our customers with innovative solutions. The niche markets our businesses serve today are diverse, our operating capabilities are robust and proven, and we have a strong, flexible balance sheet and excellent liquidity. Most importantly, we have a world-class workforce dedicated to our mission of solving our customers' most complex challenges with differentiated technology solutions. We are confident in AMETEK's future," Mr. Zapico concluded.

For earnings history and earnings-related data on Ametek (AME) click here.

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