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Can Ametek (AME) Keep the Earnings Streak Alive in Q3? - Analyst Blog

We expect Ametek Inc. ( AME ) to beat expectations when it reports third quarter 2014 results on Oct 28.

Why a Likely Positive Surprise?

Our proven model shows that Ametek is likely to beat earnings because it has the right combination of two key ingredients.

Positive Zacks ESP:Earnings ESP , which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +1.64%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.

Zacks Rank #3 (Hold): Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement.

The combination of Ametek's Zacks Rank # 3 and +1.64% ESP makes us very confident in looking for an earnings beat on Oct 28.

What's Driving the Better Than Expected Earnings?

Ametek reported better-than-expected second quarter results with both the top and bottom lines beating the Zacks Consensus Estimate. Moreover, both revenues and earnings increased year over year. The increase in revenues was driven partly by acquisitions and partly by solid execution of its four growth strategies. Higher revenue base primarily led to the increase in earnings.

Management provided moderate earnings guidance for the third quarter.

The company believes that strong execution of its four core growth strategies of operational excellence, global market expansion, new product development, and strategic acquisitions will continue to play an important role in driving growth. This in combination with its excellent backlog and strong portfolio of businesses will help the company post better results quarter after quarter.

The positive trend is seen in the trailing four-quarter average surprise of 2.34%.

Other Stocks to Consider

Ametek is not the only firm looking up this earnings season. We also see likely earnings beats coming from these 3 industry peers:

Facebook Inc. ( FB ) has an Earnings ESP of +6.25% and a Zacks Rank #2 (Buy).

Seagate Technology ( STX ) has an Earnings ESP of +2.40% and a Zacks Rank #3 .

Mercadolibre, Inc. ( MELI ) has an Earnings ESP of +6.25% and a Zacks Rank #3.

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AMETEK INC (AME): Free Stock Analysis Report

SEAGATE TECH (STX): Free Stock Analysis Report

FACEBOOK INC-A (FB): Free Stock Analysis Report

MERCADOLIBRE IN (MELI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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