AMETEK, Inc. (AME) continues to make acquisitions that will push its earnings per share above current expectations.
Growth and Income
The company is expected to grow its EPS 18.2% in 2010, 13.8% in 2011, and 15.0% over the long term. The stock also offers investors a dividend yield of 0.6%.
This Zacks #2 Rank stock trades at 17.6x 2010 consensus EPS estimates and 15.4x 2011 consensus EPS estimates.
Business
AMETEK, Inc. manufactures and sells electronic instruments and electromechanical devices in North America, Europe, Asia, and South America.
First-Quarter Results
AMETEK had total sales of $556.7 million, up 1% year-over-year, with orders climbing 19% to $582 million. Earnings per share matched the Zacks Consensus Estimate of $0.54.
Chairman and CEO Frank Hermance said, “we are very pleased with our results this quarter. We performed much better than anticipated with broad based strength in many of our markets. When compared to the fourth quarter of 2009, first quarter sales were up 6%, operating margins expanded by 140 basis points and diluted earnings per share were up 13%.”
Updated Guidance
For the second quarter, sales are expected to be up in the mid-single digits and EPS of $0.53-$0.55.
For 2010, the company expects sales growth in the mid-single digits and EPS of $2.20-$2.28, which was up from its previous guidance of $2.10-$2.20.
Recent Acquisitions
On July 1, AMETEK announced that it acquired Haydon Enterprises, from the Harbour Group, a private, St. Louis-based operating company, for approximately $270 million in cash. The acquisition is expected to add about $0.05 per share to 2010 earnings and $0.13 per share to earnings in AMETEK’s first year of ownership.
On June 1, AMETEK announced that it has acquired Technical Services for Electronics (TSE), a privately held manufacturer of engineered interconnect solutions for the medical device industry. TSE has annual sales of $50 million.
On April 8, AMETEK announced that it has acquired Imago Scientific Instruments, a privately held manufacturer of 3D atom probes, based in Madison, WI.
Estimates
In the last month, the Zacks Consensus Estimate for 2010 and 2011 are each higher by 1 cent to $2.28 and $2.60, respectively.
The Chart
The stock bottomed in August 2009 around $31. It trended higher for the next eight months, topping out in April 2010 at $44. In the last two months, the stock has sold-off with the rest of the market. AME shares are down 9.6% from its 52-week high.
