Electronic products manufacturer AMETEK (NYSE:AME) reported Q2 CY2025 results beating Wall Street’s revenue expectations, with sales up 2.5% year on year to $1.78 billion. Guidance for next quarter’s revenue was better than expected at $1.79 billion at the midpoint, 0.9% above analysts’ estimates. Its non-GAAP profit of $1.78 per share was 5.5% above analysts’ consensus estimates.
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AMETEK (AME) Q2 CY2025 Highlights:
- Revenue: $1.78 billion vs analyst estimates of $1.73 billion (2.5% year-on-year growth, 2.8% beat)
- Adjusted EPS: $1.78 vs analyst estimates of $1.69 (5.5% beat)
- Revenue Guidance for Q3 CY2025 is $1.79 billion at the midpoint, above analyst estimates of $1.78 billion
- Management slightly raised its full-year Adjusted EPS guidance to $7.13 at the midpoint
- Operating Margin: 26%, in line with the same quarter last year
- Market Capitalization: $40.81 billion
"I was pleased with our results in the quarter as we delivered record sales and EBITDA, strong earnings growth, and excellent core margin expansion against the backdrop of a sluggish and uncertain economic environment," commented David A. Zapico, AMETEK Chairman and Chief Executive Officer.
Company Overview
Started from its humble beginnings in motor repair, AMETEK (NYSE:AME) manufactures electronic devices used in industries like aerospace, power, and healthcare.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, AMETEK’s sales grew at a decent 7.8% compounded annual growth rate over the last five years. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. AMETEK’s recent performance shows its demand has slowed as its annualized revenue growth of 4.3% over the last two years was below its five-year trend. We also note many other Internet of Things businesses have faced declining sales because of cyclical headwinds. While AMETEK grew slower than we’d like, it did do better than its peers. 
This quarter, AMETEK reported modest year-on-year revenue growth of 2.5% but beat Wall Street’s estimates by 2.8%. Company management is currently guiding for a 5% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 2.9% over the next 12 months, similar to its two-year rate. This projection is underwhelming and implies its products and services will face some demand challenges.
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Operating Margin
AMETEK has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 25%. This result isn’t too surprising as its gross margin gives it a favorable starting point.
Analyzing the trend in its profitability, AMETEK’s operating margin rose by 2.3 percentage points over the last five years, as its sales growth gave it operating leverage.
In Q2, AMETEK generated an operating margin profit margin of 26%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
AMETEK’s EPS grew at a remarkable 12% compounded annual growth rate over the last five years, higher than its 7.8% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into the nuances of AMETEK’s earnings can give us a better understanding of its performance. As we mentioned earlier, AMETEK’s operating margin was flat this quarter but expanded by 2.3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For AMETEK, its two-year annual EPS growth of 8.2% was lower than its five-year trend. We hope its growth can accelerate in the future.
In Q2, AMETEK reported adjusted EPS at $1.78, up from $1.66 in the same quarter last year. This print beat analysts’ estimates by 5.5%. Over the next 12 months, Wall Street expects AMETEK’s full-year EPS of $7.06 to grow 3.3%.
Key Takeaways from AMETEK’s Q2 Results
We enjoyed seeing AMETEK beat analysts’ revenue expectations this quarter. We were also glad its full-year EPS guidance slightly exceeded Wall Street’s estimates. On the other hand, its EPS guidance for next quarter slightly missed. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 5.9% to $187.31 immediately after reporting.
Sure, AMETEK had a solid quarter, but if we look at the bigger picture, is this stock a buy? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.