AMETEK Q4 Earnings Beat: Will Q1 Outlook Drag the Stock Down?

Core Insights - AMETEK, Inc. reported fourth-quarter 2024 non-GAAP earnings of $1.87 per share, exceeding the Zacks Consensus Estimate by 1.6% and reflecting an 11.3% year-over-year increase [1] - The company's revenue for the fourth quarter was $1.76 billion, which fell short of the Zacks Consensus Estimate of $1.81 billion by 2.47%, but showed a 1.8% increase year over year [2] Financial Performance - AMETEK's EIG segment, accounting for 68.8% of total revenue, generated $1.21 billion in sales, down 2% from the previous year and missing the consensus estimate of $1.23 billion [4] - The EMG segment, which represents 31.2% of total revenues, reported $546.7 million, an 11% increase year over year, but also missed the consensus mark of $571.2 million [5] - Operating income for the fourth quarter increased by 5.4% year over year to $468.9 million, with an operating margin expansion of 90 basis points [5] Segment Performance - EIG's operating income rose 8% to $386.6 million, with operating income margins at 31.8%, reflecting an increase of 280 basis points from the previous year [6] - EMG's operating income was $111.2 million, with operating income margins of 20.3% [6] Balance Sheet and Cash Flow - As of December 31, 2024, AMETEK had cash and cash equivalents of $373.9 million, down from $396.3 million in the previous quarter [7] - Long-term debt decreased by 19.2% to $1.43 billion [7] - Operating cash flow for the fourth quarter was $550 million, with free cash flow at $498.3 million, indicating a free cash flow to net income conversion rate of 129% [7] Guidance - For the first quarter of 2025, AMETEK expects sales to be roughly flat compared to the previous year, with a Zacks Consensus Estimate of $1.75 billion, reflecting a 3.1% year-over-year increase [8] - The company anticipates adjusted earnings per share in the range of $1.67-$1.69, suggesting a 2-3% increase compared to the prior-year quarter, while the consensus estimate is $1.72 per share [8] - For the full year 2025, AMETEK expects overall sales to increase in low single digits compared to 2024, with a Zacks Consensus Estimate of $7.27 billion, indicating a 4% year-over-year increase [9] Earnings Outlook - AMETEK's guidance for adjusted earnings per share for 2025 is projected to be between $7.02 and $7.18, suggesting a 3-5% increase, while the consensus estimate is $7.31 per share, indicating a year-over-year increase of 7.38% [10]