AMETEK’s first quarter saw sales remain flat year on year, missing Wall Street’s revenue expectations, though adjusted earnings per share came in ahead of consensus. Management attributed steady operational performance to robust margin expansion, strong order growth, and improved free cash flow generation. CEO Dave Zapico highlighted that orders increased across most segments, particularly within the Paragon Medical business, which saw a sharp recovery in demand after a period of customer destocking. The company benefited from cost actions and operational improvements, helping drive operating margins higher despite macroeconomic uncertainty and industry-specific headwinds.
Is now the time to buy AME? Find out in our full research report (it’s free).
AMETEK (AME) Q1 CY2025 Highlights:
- Revenue: $1.73 billion vs analyst estimates of $1.74 billion (flat year on year, 0.7% miss)
- Adjusted EPS: $1.75 vs analyst estimates of $1.69 (3.5% beat)
- Adjusted EBITDA: $561.2 million vs analyst estimates of $545.9 million (32.4% margin, 2.8% beat)
- Management reiterated its full-year Adjusted EPS guidance of $7.10 at the midpoint
- Operating Margin: 26.3%, up from 24% in the same quarter last year
- Organic Revenue was flat year on year, in line with the same quarter last year
- Market Capitalization: $41.1 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions AMETEK’s Q1 Earnings Call
- Matt Summerville (D.A. Davidson) asked about the recovery in Paragon Medical and destocking trends. CEO Dave Zapico explained that customer destocking appeared to be ending, leading to a notable surge in orders and improved margins at Paragon.
- Deane Dray (RBC Capital Markets) inquired about order strength by region and vertical. Zapico responded that U.S. orders were up but international sales saw modest declines, with China down about 10%, and highlighted continued order momentum.
- Jamie Cook (Truist) questioned the outlook for EMG margins and capital allocation. Zapico said margin improvement at Paragon should continue in the second half, and the company remains active on acquisitions despite delays in some deals.
- Jeff Sprague (Vertical Research Partners) asked for details on tariff exposure and backlog conversion. Zapico estimated tariff impacts at $100 million annually, with a strong mitigation plan, and noted that high-end product shipments to China could be delayed but are expected to be recouped later.
- Andrew Obin (Bank of America) sought clarity on supply chain adjustments and opportunities from trade disruptions. Zapico highlighted the company’s U.S. and international manufacturing footprint, which creates flexibility and potential for market share gains as competitors face supply chain challenges.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will watch (1) the pace at which AMETEK’s backlog converts to revenue, especially given tariff-related shipment delays; (2) the company’s ability to sustain margin improvements in segments like Paragon Medical as order normalization continues; and (3) progress on mitigating tariff impacts through pricing and supply chain localization. Execution on new product launches and the scale of acquisitions will also be critical signposts for tracking ongoing performance.
AMETEK currently trades at $178, up from $169.26 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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