AMETEK Q2 Earnings Call Highlights

Key Points

• Record Q2 performance: Sales rose 15% to $2.04 billion, organic growth reached 10%, and adjusted EPS increased 17% to $2.09, exceeding prior guidance.
• Strong demand visibility: Orders jumped 28% to a record $2.3 billion, while backlog reached $4.11 billion with about 80% expected to ship within the next 12 months. Growth was broad-based across semiconductors, power infrastructure, aerospace and defense, medical technology, and automation.
• 2026 outlook raised: AMETEK now expects approximately 10% sales growth and adjusted EPS of $8.20 to $8.30. The company also highlighted strong cash generation and continued progress toward closing its $5 billion Indicor Instrumentation acquisition in the second half of 2026.

AMETEK NYSE: AME reported record second-quarter results for 2026, with double-digit organic sales growth, sharply higher orders, margin expansion and free-cash-flow growth. The company also raised its full-year sales and earnings outlook, citing a strong first half and favorable demand trends across its portfolio.

Second-quarter sales rose 15% year over year to a record $2.04 billion. Organic sales increased 10%, acquisitions contributed 5 percentage points of growth, and foreign currency had no impact. Diluted adjusted earnings per share increased 17% to a record $2.09, exceeding the company’s prior guidance range of $1.96 to $2.00 per share.

“AMETEK delivered fantastic results in Q2 with double-digit organic sales growth, excellent orders growth, strong core margin expansion, outstanding cash flow generation, and record earnings ahead of our expectations,” Chairman and Chief Executive Officer David Zapico said on the call.

Orders and Backlog Reach Records

Orders increased 28% to a record $2.3 billion, including 25% organic orders growth. The company ended the quarter with a record backlog of $4.11 billion, up about 21% from the end of 2025, according to Zapico. AMETEK reported a quarterly book-to-bill ratio of 1.12, with both operating groups posting positive book-to-bill.

Zapico said June was the company’s strongest month for orders during the quarter and an all-time monthly record. He added that July orders were also “very good.” Approximately 80% of the backlog is expected to ship within the next 12 months, while the company has begun filling demand into 2027.

Management attributed the order momentum to investments in semiconductor manufacturing, power infrastructure, aerospace and defense, energy-related markets, medical technology and automation. Zapico described the demand environment as the early stages of a multi-year infrastructure buildout, while noting that orders can have a somewhat lumpy cadence.

Segment Performance and Margins

The Electronic Instruments Group, or EIG, generated second-quarter sales of $1.32 billion, up 14% from a year earlier. Organic sales grew 7%, while acquisitions added 7 percentage points. Overall EIG orders increased 23%, including 20% organic growth. Core operating margins were 30.1%, up 40 basis points from the prior-year period.

EIG experienced broad-based growth across process instrumentation, aerospace and power businesses. Zapico identified semiconductor demand as a particularly notable contributor within the segment, including demand for precision optics and metrology products used in advanced semiconductor manufacturing.

The Electromechanical Group, or EMG, reported record sales of $723 million, up 17%, with organic sales rising 15% and acquisitions contributing about 2 percentage points. EMG organic orders rose 35%. Operating income increased 32% to a record $191 million, while core operating margins expanded 290 basis points to 26.2%.

Zapico said EMG’s results reflected balanced sales growth across aerospace, defense, medical technology and automation. He highlighted strong orders at Paragon Medical, driven by new design wins in orthopedics, drug-delivery systems and engineered medical components. Management also cited improving life-sciences demand within its automation business.

At the consolidated level, operating income increased 18% to $544 million, while operating margins rose 60 basis points to 26.6%. Core margins expanded 110 basis points to 27.1%. Zapico said the improvement reflected approximately 40% incremental margins, productivity gains and pricing that more than offset inflation and tariffs. He added that there were no tariff refunds affecting quarterly margins.

Cash Flow, Capital Deployment and Acquisitions

AMETEK generated operating cash flow of $484 million, up 35% year over year. Free cash flow rose 37% to $452 million, representing 111% conversion of net income. Operating working capital improved to 16.4% of sales from 18.6% a year earlier, aided by inventory discipline and better inventory turns.

Executive Vice President and Chief Financial Officer Dalip Puri said the company expects full-year free-cash-flow conversion of 110% to 115% of net income. AMETEK expects capital expenditures of approximately $160 million in 2026, or about 2% of sales. Zapico said roughly two-thirds of projected capital spending is growth-oriented.

Total debt at June 30 was $2 billion, down from $2.3 billion at the end of 2025, while cash and equivalents totaled $495 million. The company renewed and expanded its revolving credit facility to $3.5 billion, with maturity extended to June 2031.

AMETEK continues to expect its $5 billion acquisition of Indicor Instrumentation to close in the second half of 2026. Puri said the company expects to retain approximately $2.5 billion of cash and available credit facilities after closing. Zapico said management has become increasingly confident in the expected 10% to 12% cost synergies from Indicor, citing opportunities in global sourcing, shared services, facilities and international operations.

The company also said its integration of FARO Technologies is proceeding as planned. Zapico said FARO is expected to offer substantial margin upside over the next six to 12 months and will be included in core margins after AMETEK reaches one year of ownership during the current quarter.

Raised 2026 Outlook

For full-year 2026, AMETEK now expects total sales growth of approximately 10%, with organic sales growth in the mid- to high-single-digit range. Adjusted diluted earnings per share are forecast at $8.20 to $8.30, representing growth of 10% to 12% from 2025 and above the company’s previous outlook of $7.94 to $8.14 per share.

For the third quarter, AMETEK expects total sales growth in the high-single digits and adjusted earnings of $2.08 to $2.10 per share, up 10% to 11% from the prior-year period.

Zapico said the company expects continued demand from AI-related semiconductor and power infrastructure investments, commercial aerospace, defense modernization, medical technology and automation. He said that data centers themselves remain a relatively small portion of AMETEK’s business, but related semiconductor, power-grid and infrastructure opportunities are broader. Combined with defense modernization, commercial aerospace and power infrastructure, these themes account for about half of AMETEK’s business, he said.

About AMETEK (NYSE:AME)

AMETEK, Inc is a global manufacturer of electronic instruments and electromechanical devices that serves a broad range of industries. Headquartered in Berwyn, Pennsylvania, the company designs and produces precision instruments, electronic measurement devices, specialty sensors, and electric motors and motion control systems. Its product portfolio includes analytical and monitoring instruments, calibration equipment, power supplies, embedded electronics, and industrial motors and drives used for critical applications.

The company operates through two primary business platforms — an electronic instruments group focused on analytical, test and measurement and sensor products, and an electromechanical group that supplies motors, actuators, and related power and motion solutions.

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