(Recasts, adds analysts comments, details from research notes, share update)
By Biswarup Gooptu
BANGALORE, April 21 (Reuters) - Ametek Inc (AME.N), which makes electronic instruments and electric motors, posted better-than-expected first-quarter earnings, helped by strong sales at its two major segments, sending its shares to a new year high.
The company also forecast full-year earnings above analysts estimates and expects revenue growth to be in the high teens.
Ametek said exposure to aerospace and power markets, and the impact of its recent acquisitions should help it meet its earnings estimates, even as the U.S. economy slows.
The company expects earnings of $2.47 to $2.52 a share for the year and 61 cents to 63 cents a share for the forthcoming quarter.
Analysts were expecting earnings of $2.45 a share, before items, on revenue of $2.4 billion, according to Reuters Estimates. For the second quarter, they expect earnings of 62 cents a share on revenue of $595.33 million.
In a research note to clients, Wachovia analyst Wendy Caplan retained Ametek as her “stock of the year” and raised her earnings estimates for 2008 and 2009.
“Ametek’s relentless focus on cost reduction should continue to broadly drive profits,” Caplan said. “Acquisitions continue to be a source of future earnings, even more so as the pricing environment improves.”
For the latest quarter, Ametek posted earnings of $66.4 million, or 62 cents a share, compared with $50.9 million, or 48 cents a share, in the year-ago period.
Sales rose 21 percent $611.2 million.
Analysts expected earnings of 58 cents a share, excluding items, on revenue of $587.3 million.
The company’s two key segments — electromechanical and electronic instruments — clocked sales growth of about 20 percent each.
Ned Borland of Next generation Equity Research said Ametek’s strong performance was not solely driven by acquisitions, but also due to its international exposure, cross-production efforts — like moving production to low-cost locales — and a strong management team.
Borland also said the company’s non-U.S. business was doing better than its domestic segment and has contributed significantly to its results.
“Fifty-one percent of its sales are outside the U.S. It has got to be outpacing what’s happening in the U.S,” he added.
Borland expects the company, which has been on an acquisition spree, to focus on the process industry, and also on the third-party maintenance, repair and overhaul (MRO) companies.
Shares of the Paoli, Pennsylvania-based company were up more than 6 percent at $49.88 in afternoon trade on the New York Stock Exchange. They hit a year high of $50.78 earlier in the day. (Editing by Anil D’Silva)