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AMETEK posts higher net income, sales; unveils 2 acquisitions

AMETEK Inc. posted higher operating income for the fourth quarter of 2017 as net sales rose 17.5% from a year earlier due to strong growth in the company's electromechanical and electronic instruments groups.

The electronic instruments manufacturer also said it has acquired FMH Aerospace, a provider of engineering solutions for aerospace, defense and space industries, for $235 million. FMH Aerospace will become part of the company's electromechanical group. The company also acquired Arizona Instrument, a provider of moisture and gas measurement instruments, for about $38 million; that business will become part of the company's electronic instruments group.

The company reported net income of $238.5 million, or $1.03 per share, up from $109.1 million, or 47 cents per share, in the year-ago quarter. The S&P Capital IQ consensus GAAP EPS estimate was 67 cents for the quarter.

Operating income increased 32.5% to $229.6 million in the quarter from $173.2 million in the prior-year period. The company said its fourth-quarter operating income includes an after-tax gain of $75.5 million related to the re-evaluation of its deferred tax liabilities due to the recently enacted U.S. tax law.

Net sales rose 17.5% year over year to $1.14 billion from $973.0 million. The company said sales of its electronic instruments group increased 20% year over year due to strong and broad-based organic growth and contributions from the acquisitions of Rauland and MOCON. The electromechanical group's sales were up 13% from a year earlier because of strong order growth and contribution from the acquisition of Laserage.

For the full year 2017, net income was $681.5 million, or $2.94 per share, up from $512.2 million, or $2.19 per share, in 2016, and well above S&P Capital IQ's consensus GAAP EPS estimate of $2.58.

AMETEK expects EPS to increase 13% to 17% to a range of $2.95 to $3.05 in 2018 and overall sales to rise 7% to 9%. For the first quarter of 2018, EPS is expected to be in the range of 70 cents to 72 cents and sales are projected to rise in the low double digits on a percentage basis from the first quarter of 2017.

The company's board increased the quarterly cash dividend to 14 cents per common share, representing an increase of 56% from the previous quarter's payout of 9 cents. The dividend is payable March 29 to shareholders of record as of March 16.