AMETEK Inc. AME is set to report fourth-quarter 2017 results on Feb 1. We expect an improving end-market coupled with a diversified portfolio to drive earnings in the fourth quarter.

The company has an impressive earnings history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters. The average earnings positive surprise is 4.14%.

AMETEK’s third-quarter 2017 earnings of 66 cents per share and revenues of $1.08 billion beat the Zacks Consensus Estimate of 4 cents and $1.04 billion, respectively. Also, earnings were up 1.5% sequentially and 17.9% year over year.

Revenues improved 1.9% sequentially and 14.8% year over year. Top-line growth was driven by organic sales growth, synergies from recent acquisitions and strong contribution from a differentiated portfolio of businesses.

AMETEK shares have returned 51.9% in the past year, underperforming the  industry’s rally of 53.4%.

 

 

Key Factors

We expect AMETEK to benefit from market share gains. Consistent execution of its four core growth strategies of operational excellence, global market expansion, investments in product development and strategic acquisitions is likely to boost the top line in the quarter.

Additionally, the company’s expanding product portfolio, driven by acquisitions, is expected to drive the top line and profits. Moreover, the company’s focus on geographic and market diversification continues to expand its customer base.

The Zacks Consensus Estimate for the Electronic Instruments Group’s (“EIG”) fourth-quarter revenues is pegged at $707 million. The consensus estimate for Electromechanical Group (“EMG”) stands at $389 million.

AMTEK, Inc. Price and EPS Surprise

 

AMTEK, Inc. Price and EPS Surprise | AMTEK, Inc. Quote

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP.  Meanwhile, Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

AMETEK carries a Zacks Rank #2, which increases the predictive power of ESP. However, the company has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 67 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The combination of AMETEK’s Zacks Rank #2 and 0.00% ESP makes surprise prediction difficult.

Stocks to Consider

Here are a few stocks you may want to consider as our proven model shows that it has the right combination of elements to post an earnings beat this quarter.

Kemet KEM has an Earnings ESP of +2.94% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA NVDA has an Earnings ESP of +7.76% and a Zacks Rank #2.

Square SQ has an Earnings ESP of +1.84% and a Zacks Rank #2.

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