AMETEK Raises 2026 Guidance After Record Q3 Sales and Earnings

AMETEK (NYSE: AME ) reported third-quarter financial results on Tuesday. The transcript from the company's third-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary AMETEK reported record sales of $2.22 billion for Q3 2026, a 17% increase from the previous year, with organic sales up 10% and acquisitions contributing 7% to growth. Operating income reached a record $595 million, up 20% year-over-year, with operating margins at 26.8%. The company successfully integrated the Indicor acquisition, contributing $0.08 to EPS for the year, and is optimistic about further synergies. AMETEK raised its full-year 2026 guidance, expecting mid-teens sales growth and EPS between $8.53 to $8.57, reflecting strong Q3 performance and positive Q4 outlook.

Organic orders grew 17% in Q3, with a record backlog of $4.54 billion, indicating sustained demand across business segments. Free cash flow was a record $527 million, up 26%, with a conversion rate of 124% of net income, highlighting strong cash generation. Management emphasized strategic acquisitions and robust M&A pipeline, with an ongoing focus on deploying free cash flow for acquisitions and shareholder returns. The company's outlook remains optimistic due to strong secular trends in AI infrastructure, defense, energy security, medtech, commercial aerospace, and automation.

Full Transcript Stephanie (Moderator) Good day and thank you for standing by. Welcome to Q3 2026 AMETEK earnings conference call. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question-and-answer session.

To ask a question during the session you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference call is being recorded.

I would now like to hand the conference over to your speaker today, Kevin Coleman, VP, Investor Relations and Treasurer. Kevin Coleman (VP, Investor Relations and Treasurer) Thank you, Stephanie. Good morning and welcome to AMETEK's third quarter 2026 earnings conference call. Joining me today are David Zapico, Chairman and Chief Executive Officer, and Dalip Puri, Executive Vice President and Chief Financial Officer.

During the course of today's call we will be making forward-looking statements which are subject to change based on various risk factors and uncertainties that may cause actual results to differ significantly from expectations. A detailed discussion of the risks and uncertainties that may affect our future results is contained in AMETEK's filings with the SEC. AMETEK disclaims any intention or obligation to update or revise any forward-looking statements. Any references made on this call to historical results will be on an adjusted basis excluding after-tax acquisition-related intangible amortization and excluding acquisition-related transaction and integration cost.

Reconciliations between GAAP and adjusted measures can be found in our press release and on the Investors section of our website. We'll begin today's call with prepared remarks and then we'll open it up for questions. I'll now turn the meeting over to Dave. David Zapico (Chairman and Chief Executive Officer) Thank you, Kevin, and good morning, everyone.

AMETEK delivered superb results in the third quarter with double-digit organic sales growth, outstanding orders growth, robust operating profit, excellent core margin expansion, sizable cash flow generation, and a high quality of earnings that exceeded our expectations during the quarter. We also announced the closing of the Indicor acquisition. Integration is progressing well, and we are excited for the meaningful value creation this acquisition will provide. We also raised our full-year sales and earnings guidance to reflect our outstanding results in the quarter and our outlook for the fourth quarter.

Turning to our third quarter results, third quarter sales were a record $2.22 billion, up 17% from the third quarter of 2025. Organic sales were up 10%, and acquisitions added 7 points to growth. Overall orders were $2.65 billion, up 35% versus the prior year, driven by the continued robust organic orders growth and contributions from Indicor. Organic orders were up 17% in the quarter with growth remaining broad based across our businesses.

We ended the quarter with a record backlog of $4.54 billion, up 27% from the beginning of the year. Operating income for the quarter was a record $595 million, up an outstanding 20% from the third quarter of 2025. Operating margins were excellent in the quarter at 26.8%, up 60 basis points from the prior year. Core margins were 27.3%, up a very strong 110 basis points compared to the same period of 2025.

EBITDA was a record $704 million, up 19% versus the third quarter of 2025, with EBITDA margins an outstanding 31.7%. Free cash flow for the quarter was very strong at a record $527 million, up 26% from the third quarter of 2025. Our free cash flow to net income conversion was also excellent at 124%. Diluted earnings per share were a record $2.21, up 17% versus the third quarter of 2025 and above our guidance range of $2.08 to $2.10 per share.

Now I'll share some additional details at the operating group level, starting with the Electronic Instruments Group. EIG delivered exceptional third quarter results with excellent sales and orders growth and strong operating performance. EIG's third quarter sales were a record $1.44 billion, up 16% from the third quarter of 2025. Organic sales were up 9%, and acquisitions added 7 points to growth.

EIG overall orders were up 37% versus the prior year, driven by excellent organic orders growth and contributions from Indicor. Organic orders were up 17% in the quarter with broad-based strength across our EIG businesses. Our process, instrumentation, semiconductor, aerospace, and power businesses continue to benefit from the leading position supporting markets with strong secular tailwinds. EIG's third quarter operating income was a record $415 million, up 15% versus the same period of 2025.

Core operating margins were 29.5%, up 60 basis points from the prior year. Turning to the Electromechanical Group, EMG generated outstanding results in the third quarter with exceptional sales growth, continued superb orders growth, and impressive operating performance and core margin expansion. EMG sales in the third quarter were a record $778 million, up 20% versus the prior year. Organic sales were up double digits for the third straight quarter at 13%, with acquisitions adding approximately 7 points to growth.

Sales growth in the quarter was well balanced across our aerospace, defense, medtech, and automation businesses. EMG's overall orders were up 31% year over year, driven by contributions from the Indicor acquisition and 17% organic orders growth. EMG operating income for the third quarter was a record $212 million, up sharply at 29% compared to the third quarter of 2025. EMG's core operating margins were a record 27.5%, a sizable 210 basis point increase versus the prior year.

As our third quarter results demonstrate, our businesses are performing exceptionally well and delivering tremendous results. Overall, I'm pleased with how AMETEK is positioned today and for the future. Our outstanding portfolio, strong momentum across attractive end markets, disciplined operating model, and value-creating acquisition strategy continue to drive our long-term success. I would like to take a few moments to walk through these elements in more detail.

We have a strategically constructed portfolio of high-quality businesses with leadership positions in attractive niche markets. These businesses provide highly differentiated technologies supporting mission-critical applications required for the global infrastructure buildout. Through our close relationships with customers and deep domain expertise in these markets, our solutions are often designed directly into critical applications, creating high barriers to entry and significant switching costs.

In recent years, we have further strengthened our portfolio through organic investments and strategic acquisitions, which has increased our exposure to attractive secular growth markets and enhanced our long-term growth opportunities. The breadth of our portfolio also provides significant end market diversification, limiting reliance on any single customer, technology, or market. We remain exceptionally well positioned and continue to see strong momentum across our markets.

Our growth is supported by many strong, powerful secular trends including investment in AI-related infrastructure, increasing focus on defense, energy security, and strengthening demand across medtech, commercial aerospace, and precision automation. Another important factor driving our strong performance is our proven and disciplined operating model. Our asset-light businesses and global operating capabilities enable us to efficiently manage our cost structure while remaining highly responsive to changing market conditions.

We can support growth with moderate capital investments and have consistently and reliably demonstrated our ability to successfully navigate changing economic environments and evolving business cycles. Importantly, the highly differentiated nature of our products and our leadership positions in niche markets enable us to effectively offset inflationary pressures with pricing. These strengths continue to be reflected in our operating performance, excellent margin expansion, and robust cash flow generation. This cash flow supports a proven capital deployment strategy and a world-class acquisition process that continues to create substantial value for AMETEK shareholders.

The M&A environment remains constructive, our acquisition pipeline is robust, and we continue to see attractive opportunities that align with our strategic priorities. Overall, we feel confident about the positioning of our businesses and our ability to continue delivering sustainable growth for our shareholders. Alongside these core strategic elements, we remain committed to investing in our businesses to strengthen our competitive position. Continued investments in innovation and new product development help drive our strong organic growth.

As evidence of this, new product vitality this year remains strong at 25%. I would like to highlight just one example of how AMETEK is supporting critical power infrastructure investments and meeting increasingly complex requirements across demanding industrial, data center, and process control environments. AMETEK Solid State Controls recently introduced the next generation of its Digital Process Power uninterruptible power supply platform. The DPP Plus builds on prior platforms with enhanced reliability, diagnostics, monitoring, and service capabilities for the most difficult mission-critical applications across power, energy, and broad industrial markets.

DPP helps meet more advanced application requirements by combining true online double-conversion uninterruptible power supply technology with modern digital controls, enhanced communications capabilities, and a compact footprint. As customers continue to prioritize power quality, uptime, and operational resilience, Solid State Controls is well positioned to address these evolving requirements with its differentiated power solutions. As I have touched on, we were pleased to complete the acquisition of Indicor in the third quarter.

As a reminder, Indicor is a portfolio of exceptional industrial technology businesses that provide highly differentiated, mission-critical solutions to a diverse set of customers across a complementary set of end markets. Indicor is an excellent fit with AMETEK given their mission-critical niche market strategy and highly differentiated technology. While our integration process is still in its early stages, we are encouraged by the progress we have made to date. We remain confident in our ability to add meaningful value as the Indicor businesses integrate into the AMETEK Growth Model.

I would also like to add that we recently conducted a special AMETEK University session specifically designed for our Indicor colleagues in support of their onboarding into AMETEK. AMETEK University is our flagship three-day leadership development program where we provide colleagues with a deep dive into the key elements of the AMETEK Growth Model, our culture, operating structure, and leadership approach. We also combine the learnings with practical breakout activities and direct exchanges with executive-level AMETEK leadership. The passion and excitement from the Indicor colleagues was notable.

The program only further strengthened my belief in the quality of the Indicor businesses and colleagues and the strength of their leadership teams. Moving to our outlook for 2026 and the fourth quarter, we are raising our sales, earnings, and cash flow conversion guidance for the year to incorporate our excellent performance in the third quarter, the contributions from the Indicor acquisition, and our positive outlook for the fourth quarter. For 2026, we now expect overall sales to be up mid-teens on a percentage basis, with organic sales now expected to be up high single digits versus 2025.

Our diluted earnings per share for the year are now expected to be in the range of $8.53 to $8.57, up 15% compared to last year's results. This is an increase from our prior full-year guide of $8.20 to $8.30 per diluted share and includes approximately $0.08 of contribution from the Indicor businesses. For the fourth quarter, we anticipate overall sales to be up in the low-20% range, with adjusted earnings of $2.26 to $2.30 per share, up 12% to 14% versus the prior year. To summarize, AMETEK delivered an exceptional third quarter reflecting the strength of our businesses and the continued effectiveness of the AMETEK Growth Model.

Our outstanding performance highlights the quality of our market-leading portfolio of businesses and our ability to leverage competitive positions to capture opportunities and deliver meaningful value to customers. With mission-critical technology solutions and leadership positions across niche markets, AMETEK remains well positioned to benefit from favorable secular growth trends and to continue generating strong and sustainable long-term value for shareholders. I will now turn the call over to Dalip Puri, who will cover some of the financial details of the quarter. Then we will be happy to take your questions.

Dalip. Dalip Puri (EVP, Chief Financial Officer) Thank you, Dave, and good morning, everyone. As Dave noted, AMETEK delivered an excellent third quarter with strong growth and outstanding operational performance. We set records across most of our key financial metrics alongside double digit growth in orders, sales, operating income and earnings per share in the quarter.

Now let me provide some additional financial highlights for the third quarter. Third quarter general and administrative expenses were 1.4% of sales, down from 1.5% in the third quarter of 2025. Third quarter interest expense was $40 million. This was an increase of $17 million from the third quarter of 2025, reflecting incremental borrowings related to the acquisition of Indicor.

Third quarter other operating expenses were $5 million, down from $6 million in the third quarter of 2025. The effective tax rate for the quarter was 18.5%, up from 17.2% in last year's third quarter. For 2026, we now anticipate our effective tax rate to be between 18% and 18.5%. As we have stated in the past, actual quarterly tax rates can vary above or below our full year expected rate due to the timing of discrete tax items.

Capital expenditures in the third quarter were $33 million. For 2026, we continue to expect capital expenditures of approximately $160 million, or 2% of sales. Depreciation and amortization expense for the quarter was $116 million. For the full year, we now expect depreciation and amortization to be approximately $470 million, including after-tax acquisition-related intangible amortization of approximately $240 million, or $1.05 per diluted share.

Operating working capital in the third quarter was 17.3% of sales, an excellent 160 basis point improvement versus the same period of 2025, reflecting outstanding work by our businesses in managing key working capital components. Operating cash flow was exceptionally strong in the third quarter at $561 million, up 27% versus the third quarter of 2025. Free cash flow was also strong, up 26% to a record $527 million, with excellent free cash flow conversion of 124% in the quarter.

We are increasing our full year cash flow expectations and now expect free cash flow conversion to be between 115% and 120% of net income, reflecting the high quality of our earnings throughout the year and our expectations for continued strong performance in the fourth quarter. Total debt at September 30 was $6.7 billion, up from $2.3 billion at the end of 2025 due to the acquisition of Indicor. Offsetting this debt was cash and cash equivalents of $667 million. At the end of the third quarter, our gross debt to EBITDA ratio was 2.3 times and our net debt to EBITDA ratio was 0.1 times.

As Dave noted, the M&A environment remains constructive and our pipeline of acquisition opportunities is strong. We continue to have significant financial capacity and flexibility with $2.7 billion in cash and available credit facilities to support our growth initiatives and strategic acquisitions. In summary, AMETEK delivered another outstanding quarter, delivering record results across sales, orders, earnings and free cash flow conversion in the quarter.