AMETEK Announces Strong Second Quarter 2017 Results
Wednesday, August 02, 2017 6:55:00 AM ET
AMETEK, Inc. (AME ) today announced its financial results for the three month period ended June 30, 2017.
AMETEK reported second quarter 2017 sales of $1.06 billion, a 9% increase compared to the second quarter of 2016. Operating income increased 6% to $232.4 million versus the prior year and operating margins were 21.8% in the quarter. Diluted earnings per share increased 10% to $0.65 from the second quarter of 2016. Orders were up 20% in the quarter.
"AMETEKs financial results in the second quarter were outstanding," said David A. Zapico, AMETEK Chairman and Chief Executive Officer. "Strong sales growth combined with superb operating performance drove double digit earnings growth and excellent cash flow generation. Given these results and our positive outlook for the balance of the year, we are again increasing our full year 2017 guidance."
Electronic Instruments Group (EIG)
For the second quarter of 2017, EIG sales were $657.7 million, up 10% from the second quarter of 2016. EIG operating income was $165.2 million and operating margins were 25.1% in the quarter.
"EIG had a great quarter with excellent sales and operating performance. Sales were up nicely on solid organic growth and the contributions from the acquisitions of Nu Instruments, HS Foils and Rauland," commented Mr. Zapico. "We continue to see broad based sales growth across our EIG businesses and our encouraged by the strong orders performance in the first half of the year."
Electromechanical Group (EMG)
In the second quarter of 2017, EMG sales were $406.9 million, up 7% compared to the second quarter of 2016. EMG operating income was $85.6 million and operating margins were a very strong 21.0% in the quarter.
"EMG also had a great quarter with outstanding sales and orders growth. Sales were up driven by solid organic growth across all businesses and the contribution from the acquisition of Laserage," noted Mr. Zapico.
"We are very encouraged by the excellent first half results. Sales and order growth has been strong and broad based. We are executing very well and generating strong cash flow, which we will continue to invest back into our businesses and on strategic acquisitions. While our performance reflects, in part, improving macro-economic conditions, it also highlights the underlying quality of our businesses and the strength of our Growth Strategies," commented Mr. Zapico.
"As a result of the second quarter performance, we are increasing our sales and earnings guidance for the full year. We now anticipate 2017 sales to increase high-single digits on a percentage basis, with organic sales up low to mid-single digits. We are increasing our 2017 earnings guidance range to $2.46 to $2.52 per diluted share, up 7% to 10% over 2016 adjusted diluted earnings per share. This is an increase from our previous range of $2.40 to $2.48 per diluted share," he added.
"For the third quarter, we anticipate sales will increase approximately 10% compared to the same period last year. We expect our earnings to be approximately $0.60 to $0.62 per diluted share, up 7% to 11% versus the third quarter of 2016," concluded Mr. Zapico.
AMETEK will webcast its second quarter 2017 investor conference call on Wednesday, August 2, 2017, beginning at 8:30 AM ET. The live audio webcast will be available and later archived in the Investors section of www.ametek.com.
AMETEK is a leading global manufacturer of electronic instruments and electromechanical devices with annual sales of approximately $4.0 billion. AMETEKs Corporate Growth Plan is based on Four Key Strategies: Operational Excellence, Strategic Acquisitions, Global & Market Expansion and New Products. AMETEKs objective is double-digit percentage growth in earnings per share over the business cycle and a superior return on total capital. The common stock of AMETEK is a component of the S&P 500 Index.
Statements in this news release relating to future events, such as AMETEKs expected business and financial performance are "forward-looking statements." Forward-looking statements are subject to various factors and uncertainties that may cause actual results to differ significantly from expectations. These factors and uncertainties include AMETEKs ability to consummate and successfully integrate future acquisitions; risks associated with international sales and operations; AMETEKs ability to successfully develop new products, open new facilities or transfer product lines; the price and availability of raw materials; compliance with government regulations, including environmental regulations; changes in the competitive environment or the effects of competition in our markets; the ability to maintain adequate liquidity and financing sources; and general economic conditions affecting the industries we serve. A detailed discussion of these and other factors that may affect our future results is contained in AMETEKs filings with the U.S. Securities and Exchange Commission, including its most recent reports on Form 10-K, 10-Q and 8-K. AMETEK disclaims any intention or obligation to update or revise any forward-looking statements.
(Financial Information Follows)
Consolidated Statement of Income
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Net sales $1,064,604 $977,706 $2,072,286 $1,922,104
Cost of sales 699,739 639,711 1,364,674 1,263,392
Selling, general and administrative 132,480 118,959 254,929 231,153
Total operating expenses 832,219 758,670 1,619,603 1,494,545
Operating income 232,385 219,036 452,683 427,559
Interest expense (24,552) (23,706) (49,068) (47,107)
Other, net (4,478) (4,769) (8,838) (6,849)
Income before income taxes 203,355 190,561 394,777 373,603
Provision for income taxes 52,874 52,368 105,370 101,240
Net income $150,481 $138,193 $289,407 $272,363
Diluted earnings per share $0.65 $0.59 $1.25 $1.16
Basic earnings per share $0.65 $0.59 $1.26 $1.16
Weighted average common shares outstanding:
Diluted shares 231,588 234,790 231,296 235,503
Basic shares 230,158 233,285 229,853 234,134
Dividends per share $0.09 $0.09 $0.18 $0.18
Information by Business Segment
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Electronic Instruments $657,663 $595,992 $1,277,432 $1,164,948
Electromechanical 406,941 381,714 794,854 757,156
Consolidated net sales $1,064,604 $977,706 $2,072,286 $1,922,104
Segment operating income:
Electronic Instruments $165,216 $152,115 $321,937 $293,947
Electromechanical 85,559 80,316 164,909 159,742
Total segment operating income 250,775 232,431 486,846 453,689
Corporate administrative and other expenses (18,390) (13,395) (34,163) (26,130)
Consolidated operating income $232,385 $219,036 $452,683 $427,559
Condensed Consolidated Balance Sheet
June 30, December 31,
Cash and cash equivalents $516,483 $717,259
Receivables, net 642,263 592,326
Inventories, net 541,213 492,104
Other current assets 89,314 126,501
Total current assets 1,789,273 1,928,190
Property, plant and equipment, net 492,507 473,230
Goodwill 3,117,129 2,818,950
Other intangibles, investments and other assets 2,136,104 1,880,304
Total assets $7,535,013 $7,100,674
LIABILITIES AND STOCKHOLDERS EQUITY
Short-term borrowings and current portion of long-term debt, net $272,550 $278,921
Accounts payable and accruals 722,596 645,520
Total current liabilities 995,146 924,441
Long-term debt, net 2,128,838 2,062,644
Deferred income taxes and other long-term liabilities 818,833 857,076
Stockholders equity 3,592,196 3,256,513
Total liabilities and stockholders equity $7,535,013 $7,100,674
Contact: Kevin Coleman 610-889-5247
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SOURCE AMETEK, Inc.