) reported second-quarter 2013 earnings per share of 52 cents, in
line with the Zacks Consensus Estimate.
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The company reported revenues of $878.8 million, down 0.5%
sequentially but up 6.4% year over year. The year-over-year
increase was due to strong demand in the Electronic as well as
Electro mechanical segments.
During the quarter, orders grew 2.0% from the year-ago quarter to
$895.0 million. The book-to-bill ratio was 1.02.
Revenues by Business Segments
Electronic Instruments Group (EIG)
comprised 55% of Ametek's sales in the quarter, up 6.9% from the
year-ago quarter to $483.3 million. The second quarter was strong
due to strength in Aerospace and oil and gas businesses, combined
with the contribution from the Micro-Poise acquisition.
Electro Mechanical Group (EMG)
segment generated 45% of its sales, up 5.8% from the year-ago
quarter to $395.5 million. Management stated that the strong
growth in Floorcare and Specialty Motors business and the
Dunkermotoren acquisition led to the top-line increase.
Reported gross margin for the quarter was 35.4%, up 40 bps
sequentially but down 20 basis points (bps) year over year. The
sequential increase was due to a favorable mix.
Operating expenses (SG&A and Depreciation) of $108.6 million
were down 0.5% from $109.1 million in the year-ago quarter. The
reported operating margin was 23.1%, up 70 bps from the year-ago
quarter margin of 22.4%. Selling, general and administrative
(SG&A) expenses decreased as a percentage of sales, while
depreciation expenses remained the same.
Reported net income was $128.3 million or earnings per share of
52 cents compared with $113.7 million or 47 cents in the
comparable quarter last year. As there were no special items
other than stock-based compensation expenses, adjusted net income
was the same as GAAP net income in the quarter.
The company ended the second quarter with cash and short-term
investments balance of $207.6 million, up from $177.3 million in
the prior quarter. Trade receivables were $521.5 million, down
from $529.2 million in the prior quarter.
Cash flow from operations was $128 million, up 11.0% year over
year. Free cash flow was $117 million in the quarter.
For the third quarter of 2013, Ametek expects total revenue to be
up in mid-single digits over the year-ago quarter revenues.
Earnings per share are expected to be in the range of 51 to 52
cents, up 9% to 11% year over year.
For 2013, management expects revenues to be up in mid single
digits on a year- over-year basis. Earnings are expected to be at
the low end of the previously guided range of $2.08 to $2.12 per
Ametek manufactures and sells electronic instruments and
electromechanical devices. The company reported a decent second
quarter with both earnings and revenues increasing year over
We remain encouraged by the improving order rates in the quarter.
Also, the company gave modest third quarter guidance but lowered
its earnings expectations for 2013, reflecting a weak economic
We believe that Ametek's new products, acquisitions and global
market expansion will continue to drive growth. We also remain
optimistic about its long-term prospects and contend that its
restructuring activities will reduce operating expenses. The
company stated that it expects $100 million of cost savings in
Currently, Ametek has a Zacks Rank #4 (Sell). Other stocks that
are performing well at current levels include SanDisk (
) and Syntel Inc. (
), carrying a Zacks Rank #1 (Strong Buy), and National
), carrying a Zacks Rank #2 (Buy).