AME - Earnings call transcript Q3 2024

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Operator

Hello and welcome to the AMETEK Third Quarter 2024 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. It is now my pleasure to introduce Vice President of Investor Relations and Treasurer, Kevin Coleman.

Kevin Coleman

Thank you, Andrew. Good morning, and thank you for joining us for AMETEK's Third Quarter 2024 Earnings Conference Call. Dave Executive and Financial Vice are and Executive Officer. today Puri, Dalip President me Zapico, Chief Chairman Officer; With and Chief

forward-looking significantly factors and During will that may to today's any of results to uncertainties A based statements, to actual making differ change filings that results risk the is future subject expectations. which various call, or discussion on cause are detailed from course with be SEC. forward-looking affect the may statements. of obligation the risks our intention AMETEK any revise disclaims in update and we AMETEK's or uncertainties contained

and share Any to first charge Investors a GAAP found million related $XX.X on $X.XX this release XXXX call for to adjusted Reconciliations integration pretax adjusted on and per Paragon references XXXX in be or measures costs diluted of will between website. Medical XXXX can of be our amortization, on an acquisition. made tax, press or excluding or guidance, and in after the basis, quarter of XXXX results, our section excluding to the intangible the acquisition-related

now remarks the begin questions. call for open meeting I'll We'll it today's to up then and prepared with Dave. turn

David Zapico

in morning, AMETEK good and Kevin, you, Thank quarter. delivered the strong everyone. results third

orders. Our our in growth overall earnings in expectations, executed cash business above conversion has growth and double-digit orders organic extremely per solid in outstanding share well, resulted positive flow margin performance, with

deployed approximately fit Vision, of strategic quarter, million an Additionally, end Virtek business. the Subsequent our we during acquired the Creaform with share we the $XX on repurchases. quarter, to excellent

performance. team's our with pleased very am I

positioned macro headwinds for through Our businesses long-term ensuring while short-term remain we focused managing are growth. on

balance a and growth successful efficient markets. a cash structure, of niche positions diverse across proven leading flows, and operating a have sheet robust set model We strong

third results. our financial let quarter to turn me Now

the orders Third currency X.XX, orders Organic up XX%. Book-to-bill X.X flat. and Overall quarter were was same were up XXXX. foreign points $X.XX X% and was acquisitions sales X%. in sales X%, were billion, in up the period from down organic added quarter were

in with solid ended a record backlog saw quarter levels. We orders. of sequential the we strong Additionally, growth $X.XX billion, near a

the AMETEK's operational third excellent. performance quarter was in

our was led operating and an quarter reflecting to quarter flow prior the model income million, the performance $X.XX above prior Core in year increase third year, margins, Our operating currency, and million, of XXX%, the the were quarter third $XXX XX.X% the with business and up $XXX share, management impact of versus strong efficiency a conversion, flow up EBITDA was in This versus margins. a $X.XX our the in and over quarter of to XX.X%, of flow in cash very the approach cost and operating dilutive with to EBITDA strong X% margins acquisitions range at versus from resulted and versus margins of earnings per Operating was the strong guidance X% excellent, in Cash the X% share. foreign excluding per cash XX.X%. the impressive prior the free disciplined third $X.XX diluted free capability. operational quarter asset-led XXXX, up quarter. XXXX very XX basis impact year. X% up points were

at details provide Now the level. let me some additional group operating

the remains strong X down growth instrumentation our points. & of last of Defense business, EIG, EIG and our expansion operating while margin First, solid third with were Growth overall of $X.XX X%, well line saw in businesses. CAMECA, year. contributed Organic quarter. with margins, quarter businesses, the acquisitions and Group, strong quality perform research sales the our in across Aerospace reflecting Electronic sales to the Instruments billion, continues were high-end levels outstanding also

had we across growth did $XXX parts delays and secular across business million, temporary XX.X%, versus expected, our of remains the XX our operating number While a businesses pipeline some quarter. core spending income positioned and very year. XX.X%, project in last are a our funnel well operating margins EIG up see new we as of margins prior solid, markets. points X%, up up was EIG year's basis basis XX were were very third points from strong EIG

orders across Now over switching the & with acquisitions our million, were EMG's was businesses XX in the Defense Electromechanical the very Strong period, quarter to to year growing margins our XX% excellent while the quarter Group. the operating operating quarter points destocking. and $XXX was organically. were to third of offset sales inventory sales by were businesses the third to versus quarter, X% OEM-exposed weakness million, contributing up organic year, EMG's strong the $XXX prior with XX% XX.X% down growth. core EMG's in impact quarter prior growth margins up compared expected XX.X%. of with EMG in due income X% Aerospace

quarter. remain deliver results deliver third We headwinds navigating results. we continued strong and to on strong effectively model a growth AMETEK delivered executing focused the AMETEK a face growth, of environment. positioning demand strong macro in ensuring while the our in for performance long-term choppy

strategy. to component are a core acquisition turning Strategic of model. acquisitions Now our our growth

highly XD Virtek to and in market with industrial approximately the would that, the Creaform offerings and is Canada and its of I'm AMETEK customers. laser-based of is family. and technology our Vision AI Virtek has broadening We enhance productivity, announce proprietary Virtek sales projection Vision. strategic Waterloo, business our improve systems suite a are XD Virtek's range enabling to software. cash welcome our to quality of solutions and I a for inspection capabilities wider and committed acquisition, aerospace, by Virtek across fit Virtek to range reduce headquartered and an team excellent automation smart million. applications. of newest cost measurement is defense acquisitions like inspection to and advanced annual $XX flow expand a strong provider of their segments. systems, automated projectors, our our in excited and offering attractive deploying laser powered portfolio With leading cameras a

our ahead, pipeline robust. Looking remains acquisition

noted, committed they efforts customers where to our products with being are teams our support and development initiatives to remains technologies flexible incremental investing balance area. complex including our we product technologies the As are are to an growth solve innovative business, see in challenges. our on focused advanced provide new sustainable positioned differentiated of $XX AMETEK ensure most a have we differentiated our also customers' to long-term growth. for and remaining and in million need. anticipate them investing help developing active we this strong sheet developed XXXX, and our In countless highly in capabilities businesses Throughout examples to

success third our product activities is outstanding X new through an from our measure index of was measures we over In way the sales which introduced development Vitality XX%. our years. vitality quarter, past One products the index, the the

to product recently enhance business, In and to CAMECA's AMETEK. our micro-analytical will and their metrology Polygon instrumentation, addition enhances expertise internal technology activities, We're in also and cutting-edge excited efforts technology leader Polygon provides resonance and and ultra-low source cyclotron team CAMECA's a This to advanced power our specializes acquisition development metrology technology accelerate to capabilities technology. electron instrumentation CAMECA that welcome us new development ion ultracompact, advanced help manufacturing. a access announce portfolio. technology Polygon Physics the Physics. chip of to in small I'm that completed pleased Polygon

the for Now year. turning outlook the of remainder to our

our earnings for full third quarter raising Given guidance our are the we year. results,

an to to the share up continue year. X% increase prior overall is X% up $X.XX, range from share. be expect per now range be $X.XX This We sales prior to previous versus the year of Diluted X% $X.XX in are to the our X% to earnings diluted the guidance $X.XX to per of to versus for expected year.

in digits, range up up of the sales X% $X.XX For to XX% to prior earnings year. the anticipate fourth the with we quarter, to overall versus be mid-single $X.XX,

XXXX. allowed In AMETEK over thus time, summary, of the our the of successful these very growth environment managing has an a highly challenges. differentiated capabilities outstanding allowed with has businesses. with managing and allowed This to model to deliver emerge results. set macro in a acquisition through deliver even pleased different long uncertain us of in cycle. of and earnings of combined manage our economic in phases portfolio, stronger niche growth performance AMETEK confident We're us through quarter period and exceptional also ability double-digit been strength successfully with has to weakness uncertainty economic us strategy, periods excellence The diverse The operational navigate team's and I'm far has to growth. throughout the our or

Puri, now will of it for turn Dalip some to through will And over financial glad excited questions. to details of the take take be who then your we'll the the us future. quarter. are Dalip? We I

Dalip Puri

good everyone. and morning, Dave, you, Thank

flow cash with results in strong As operating Dave high noted, the AMETEK performance excellent and free quarter third delivered conversion.

me highlights quarter. Now the let some additional financial provide for

unchanged were and quarter from the prior essentially general expenses year. Third administrative million, $XX

sales, a of percentage third quarter. down from As G&A of in sales, X.X% came at expense X.X% last in year's

fiscal and expenses approximately XXXX, be X.X% For of to year sales. are general expected administrative

expense higher following interest to debt XXXX was acquisitions. balances million quarter from quarter $XX up of due the million, third Third $X recent

effective were down in other quarter XX.X%, quarter. versus million from diligence XXXX. in and tax the quarter third to period, of quarter largely due expense $X due The higher was in up income Third operating expenses the XX.X% acquisition-related lower prior rate the the pension

lower tax XX.X%, driven anticipate to rate to quarter XX% tax expirations. effective and For due XXXX, rate we statute our between a be by fourth

in stated either actual past, full rates the rate. dramatically, positively quarterly have tax year differ negatively As or estimated we the from can

year quarter expense and we quarter approximately $XXX in full the expenditures in of and million. to or was $XX million Depreciation $XX Capital amortization the third sales. for about X% expenditures be million, capital were expect the

be per For including expect acquisition-related share. approximately depreciation million, million intangible the tax full $XXX amortization or of amortization to we $X.XX $XXX and after year, diluted approximately

capital record cash working up third Cash million, conversion cash million, in sales. also flow was versus the prior $XXX generation XXX% Operating while the quarter a operating the X% up Operating of year. cash Free the of was over generation. XXXX, flow This flow was quarter flow third in third outstanding XX% X% and quarter free was in was level quarter for quarter. excellent. third cash at flow both was the free $XXX

full expect flow of free approximately conversion the XXX% income. For we year, cash now to of net XXX%

on quarter, share repurchases, shares During $XX approximately our open in of the spent we stock million XXX,XXX repurchasing common market. the

placement private of maturing million end this quarter, we XX ratio end $XXX approximately ratio our X.Xx, of equivalents note. billion the Additionally, at was and and our quarter, was billion, of net debt-to-EBITDA September the is million. Total of at $X quarter end At $X.XX and a cash X.Xx. third debt-to-EBITDA the Offsetting million debt debt gross was the in from cash XXXX. $XXX down the paid down $XXX down the

growth and capacity financial credit strategy available $X flexibility with initiatives. significant facilities and over have to cash We and our support of billion acquisition

the In in AMETEK delivered summary, strong results quarter. third

Our well our and excellent a markets, focus operational Kevin? excellence earnings, strategic near-record to and margins leadership contributed strong strong our positioned key flow. we balance across are With robust initiatives cash backlog and continued for long-term growth. free sheet,

Kevin Coleman

please Thank you, we lines Dalip. open could for Andrew, questions? the

Operator

Davidson. the D.A. first Our line Instructions] Matt question [Operator with Summerville of comes from

Matt Summerville

little update, work you markets David, seeing seeing specifically across bit you're have in what And medical- follow-up. end sciences-facing maybe on on those around in a EMG and could a commentary of destocking? life I both you're businesses, then do specifically a in detailed some and what more your and EIG

David Zapico

sure. Yes,

if look we're recent XX of work the the our right OEM Paragon customers to had We heading had both remain range we going the Again, line order actually, book-to-bill and automation the both the where at trends, and positioned direction. down And continue. demand with a main excess well business. our the And of of trends and in areas largely programs We our EMG, headwinds rates. the businesses terms destock, Paragon business the as -- just attractive a X.XX. on in to up in levels of within And really plus the destocking positive encouraged trend In automation was these the stocking in are continue are we quarter inventory. organically. by in you saw expectations

orders, in about we're So we feeling that. pretty growth good and we saw stabilized, solid sequential

Matt Summerville

that remarks EIG cetera? which business. about you're in talking customer just of to And in and most quantify through of kind impact? fence if the [indiscernible] then seeing still portion maybe you as that, bit divisions being your ring a delays all And when prepared of respect follow-up, with markets, which by mentioned to talk able Can you're a et that little are the at impacted end you some

David Zapico

Yes, do Matt. Sure. that, I'll

project election impact In uncertainties. given terms geopolitical the quarter lease as of we of quarter, last about cautious remain out project the quarter. delays that expected. Customers here spoke economic, specifically remains this funnel the various Test key That's these and opportunity last largely played is our strong. And what are talked And in Measurement and new point businesses. we EIG our about

So definitely things are getting worse. not

trend from to orders to X EIG the QX XX minus organic fact, went minus organic X QX. In in QX organic in in minus

So pretty there. trend about positive by the feeling encouraged we're good the --

Operator

And Deane Capital of our next Dray question from with line comes Markets. the RBC

Deane Dray

that Dave, upon I think maybe markets, their don't more you start end different on comments can negative, the of each extent through to most some we been got the but maybe you take us messages, exposures, China, mixed based views can there's company geographies? the And ever can, has but there.

David Zapico

businesses. our talked business. year. digits up overall also for research I'll solid to businesses I in strong pull go in for single try all across energy a energy the the We very organic single high-end to and I'll forget Growth Process to talk to our Both expect quarter. it. Process and Process to the our our around low we be quarter. get them in for business, first CAMECA, organic flat digits and low the growth looking if our and back questions. full Great sales sales one about ahead, anything, continue quarter businesses declined a me about also good had had we And remains

was Defense. platform. balance in Aerospace up have Defense defense, balance a aftermarket. the we and And aftermarket digits. our sales OEM strong good additionally, and and XX% organic were commercial a & Aerospace wide and of and sales and across both performance commercial overall the any a AMETEK, not dependent mid-single switching is we good between one quarter, OEM products reminder, won Next, have about applications & delivered A we businesses. strongest of between range on Growth

the we single-digit markets. long-term to from year, Defense for across the businesses. growth continue these And & expect we're to So positioned for Aerospace benefit well full high organic growth our

Power businesses and contributions to [indiscernible], Research in & the the I'll acquisitions, mid-single Next, of Organic up & in digits go single low them. the sales down were Amplifier digits by quarter. were Industrial Industrial. quarter, driven recent Power of both

down We be sales year. low our for & businesses Power full digits expect Industrial organic to single the for

Then of across full And finally, were from XX% expect Automation of the Engineered to the digits there Paragon Medical. low year, segment. organic digits & Organic sales due our driven we inventory to decline base. our market increased sales high Overall continued by in down mid-single sales contributions continue the normalization range, single Solutions OEM to customer the for as headwinds destocking continue. primarily

U.S. little Talking some offset growth there. about in in yes, strong the the mix geographies, We had the and by Europe a declines Asia, different in

You China. talked about specifically

manufacturing customers division, or was Our are their environment XX%. produce in up Asia business synergies. improve Technology strong processes, by processes, automate did actually We well cleaner, UPT our China had the growth Ultra Precision AMETEK and products make China our to used in

will from market some or very announced, the headway results that in stimulus difficult and stimulus choppy we're predict aren't but share the what's happening from But seeing China. positioned. and well wins very good market in But making that markets. now it's we're remain to been just So there's

it's what happens quarter. wait just So see and each

Deane Dray

That's And on China. really your it really is helpful. how it remarkable in what exposures -- are depends

with the You just all it negative brush can't there. paint

it longer get demand lasts, inventory lower impression an a to quick destocking, it's opposed this really that a correction. follow-up, I And the of the as just context just always as

those dynamics? sense? through? that can an versus X like you of Just still reset, do say, Paragon? inventory is kind you there work a down is see sell-in of So Is how separate coming sell-through what's your let's and Or there it really

David Zapico

and It's the but crisis working a work we the we and to there's it's of and other when happening we're And of on we're space. that is have automation same and difficult and medical see question, pretty then of the in growth -- parse, through same a space thing that confident end through supply it. obviously that chain great kind the level math inventory some

activity. activity, the the new decision So we're influences the is pipeline our seeing other business -- that factor

work but cancellations when there's tremendous Our active. some on they're delayed, and there's they're number programs, to and go very of full out we're opportunities. uncertainty customers are but program forward, on working no new getting going We'll

So issue we'll it's order we can think we that think and an issue, in and starting with work demand it's it. a not happen destocking to business. And you some our of trends overall the through see

Deane Dray

there. it leave I'll Excellent.

this nice cash quick a shout was flow a Just free out. That quarter.

David Zapico

Dave. great you, team The did Thank job. a

Operator

Our next Jeff Partners. Sprague Research question with line comes Vertical from the of

Jeffrey Sprague

listening little to so repeating specifically just sales just if answer you David, on your terms Paragon, -- you I but on if know in there, late, I commented Deane, don't don't wouldn't it. to already the trajectory a know mind you was I if of

overall, on pieces EMG on, right? an just XX% but if It's more already. interesting just a inside Maybe of kind that right, of set then certainly little could of with And kind going organically? currents, bit haven't you cross moving unpack you the orders up destock

David Zapico

Yes. I was that say at haven't I gone substantially EMG can in every orders. deeper, division up but

wasn't one it So area.

it parts the So order. was across board are EMG in up of all

encouraged we're by So really that.

growth really excellent headwinds engineering things provide will program these and implantable again, to single abate. Speaking well surgical be the rates. instruments many, solid opportunities, when continue it's about growth destocking additive business, components, excited in positioned capability And med Paragon, And tech as use leading we in. phased is capability, many upside manufacturing of get with markets a attractive the the which consumable future new wins, business

some of job process At efficiency but the the really are and -- the going improvements And there's on substantial doing we're things that business. doing is same that that in proceeding well. excellent working difficult is on. time, because an team

Paragon very a improvement for had pleased. other met They and sequential its very QX. with overall, similar talked about I'm I pleased it. in our mean, that we expectations So businesses order

Jeffrey Sprague

start like. plan in sort the as restructuring arguably of Can you XXXX of there's obviously, drawdown, a QX and David, recovery things right, of sort maybe the and then of stabilize, up give some things us some margin restructuring tailwind silver sense it back these kind likely to through on into itself, into sales year? the we and work a on guess, allows accelerate new you of if in pick lining the the I to the

David Zapico

Yes.

happening. scenario when the I we likelihood about give year. has time something think of of you're talk at XXXX, the you don't about high But a talking is that guidance this

to going and about in. we're I So things tough product the continuing new year. that mean to all it's fund time. closures are phases in stay some from business next significantly. there and talking a away We're improving the that are plant correct. the There to you're But pointing

So it's be scenario business. with going a move very, to forward we positive very as that

Operator

of line question Wertheimer next from the Our Rob Melius with comes Research.

Robert Wertheimer

couple I had of a cleanups.

Just of I on to year. destocking a guys should the destocking. mean end kind were the of bow through that continue put the you clear

it know The don't mentioned the again that year. think your whether seem there. that imply I you we're getting any implied Dave. in I continuation indicate orders continues intended -- was to now, comment was to next

David Zapico

Yes.

last seeing quarters of we've in all businesses. encouraged definitely our destocking couple in seeing growth. seeing incremental it stabilized EMG, We're it we're that. where the in was seeing. think by I We're orders occurring. We're We're the of

improve. destock isn't be like going There's going to positive. to all this we're switch. But slowly that's a So --

year, or make side. on, on And give get you for what guidance we'll operations to money. the we're occurs into working the As destock that's we're whether next going year. next But not, the we

trends is there's now. So my point positive

the macro -- process year. each opportunities important giving uncertainty at follow fund. conditions through at why and guidance on We it's sitting working standard with market geopolitical the very through this our go you given and the process. beginning we're We at best a decide down for And budgeting our of because and process sales election doing through have to to look haven't right cost all good comprehensive next what now, opportunities information that's and with and firm a given go business reduction process We year. next look we investments and

Robert Wertheimer

may, similar down? sheet seeing to Perfect. as looks robust. acquisition I commit And Are inquiries just things pipeline Obviously, process? your then on if is assume normal any should Or balance hesitation is the slowing you stock potential things on pipeline, we amongst the your come great.

David Zapico

were question, the my is in a just And on where like period market, dealing we're but get about with trying are rates I that's in It's excellent Rob. our subjective robust, things. a is everybody things a question. on But coming Yes, good of feel lot We talking this people things to a order. read to interest pipeline were their was higher and and lot of businesses stock.

like an feel and So like next it I early sometime feels feels sometime moving, next It accelerated year, things year. they're pace. like are moving

Operator

comes question line Graham Partners. next Our the Seaport Scott of with from Research

Scott Graham

just couple Really of a them.

know internally. you The to tricky up doing nevertheless, because more? there maybe you is units? percentage a a You're index to that, businesses Could that's but some a can certain little X-year that I investing I Vitality is XX%. number a get on lot can you're really And differentiated know I And is products. higher? in is it's you're out -- of thing anything always business that mentioned think standing the which focused maybe heavily unbundle Dave, you Vitality, go? bit And a But that single that even titers. you trail. go that all that where

David Zapico

Yes.

XX% right at for think and between XX%, could our I probably range. and And to XX%. XX%, or think the the up to and we down right go -- business go that's is it XX% XX% level we're

to going it's projects. in in mentioned, distributed good million projects. the across As incrementally our you future. We're company. on sales $XX good result They're spending They're very

through cases, new coming There's price been cost processes. points, the a development at reductions job of too. some in lower they're In good

the it leader enables to when premium up-to-date line and you're and the for in products. fresh you have a the pricing that niche -- you we're it's justify new So in, product markets

feels it's all and core. good. it's -- It part feels of working all our that well So

market you in spending good followed the as for the us and time, consistently, off continue the we've is fund plan we it. is market a bad, run, know, long -- the to us long R&D whether for we or paid So and you've it's

Scott Graham

I more the you bit ask little can something it. extent forward-looking to wanted that's that just to answer a

of portfolio of your I'm in parts in your just for their various struggling potential is One production. wondering, X that customers Aerospace in large dampen does business? your XXXX Aerospace very outlook

David Zapico

Yes.

We related in haven't done situation, it's them. some our for we did know the minor the detailed situation, were but QX And QX. of the factored guide and XXXX. work on to but fluid confident we that see quarter, delays around the And we we a impact we able in to in for obviously, feel work

exposures wide single There's across Our diverse any a healthy very to Aerospace customer. and businesses no mix sales. platform overexposure single aftermarket have platforms, of range any OEM or of a

focus on we we're well we're the think we're we forward. much the but for feel So well, really of on. in, year. a the call of and benefit focus And we And selling We this on up customers the from can the going as strong some through that chain. position a do there's situations in have technologies rest that about hopefully, good of good value a that what feeling we And that, not we're positioned work some in demand, the properly larger it. markets and we we're to niche

Operator

Mizuho. Linzey with Brett Our line next of question comes the from

Brett Linzey

back dynamic destock OEM the and once more. Just come wanted the to to

OEM is were to related math exercises teams year percent, the in to gauge doing noted pressure. of you results or internal I has the much any or way of been the on there the how pressure some destock? order this that to quantify dollars guess revenue So

David Zapico

go we you say it, about pretty yes, significant. significant. I'd that talked if it's It's QX, to -- back

reverses, next So clearly if it's not year. there that's -- not that's that headwind a for

it was yes, our destock that Paragon, in -- business was and substantial. automation with So

Brett Linzey

Okay. the And it. on project then Got just delays.

you any you it was readiness from various verticals. return? you XXXX? these contemplating as quarter So you in I project might I catch-up that when and terms in Or expectation guess Are the the have of think part customers hearing to are of what noted guide? slid fourth

David Zapico

our normal I guide assumes for EIG that's businesses and strong. think pretty our a QX QX project calendar

QX a business. sequential projects that increase So we'll from to related seasonality, see in QX to to related

So year-end on. like definitely spending feels some it going there's

So that's positive.

Operator

from comes of the question Research. next Our line Coe Wolfe Nigel with

Nigel Coe

to come is X% think, orders. to back wanted Just you Plus I what said. organic,

you fourth were signaling the mistaken. growth don't if I'm quarter, until the return to great that's So news. I not think

that So that? happened color just -- call there? out? there September during changed just anything Was aerospace any Any some

million thereabout, then of number. the kind there's back at on million, like maybe of about seems And it that, if of orders, like growth not million kind organic that's the of we organic. sort a look implied end $XXX backlog or $XXX $XXX That's of big

for acquisition just book-to-bill was Paragon I'm this So and as what wondering whether the Virtek has influence well.

David Zapico

Yes.

The first point orders. is we don't on give guidance

late. what quarter how any on QX a it's it But in the information you event, being know got So I your don't was.

was... point second The

Kevin Coleman

build? Backlog

David Zapico

and we healthy, in look The was pretty It's company and positive. number at. -- backlog It and billion $X.XX have turn us. the front for the orders don't that we of build, yes, something it's

just So We're trends we're it would the positive. quarter in. going much It's encouraged by did positive you it. wouldn't a it just think -- I it's read And occur maybe to and than into be. too thought we I have think earlier good

Nigel Coe

Okay.

nature that? to the bit back Okay. achieve in year it at inventory therefore, Paragon, consider mistaken we just asked spring obviously, we've about to really draw. we and I longer [indiscernible] might XXXX? plan think in be there. seen do sort And think then of that to sales Should you in onetime Or Maybe you is a I'm little looking this take

David Zapico

question your you. broke But on hear our we... we couldn't Nigel, up So and end,

Nigel Coe

]. reverse [indiscernible] inventory the [ Paragon, Okay. basically in XXXX

David Zapico

structure, definitely cost as XXXX, have that time, think to improve 'XX. I inventory new going said, of hopefully, it I we Yes. mean lower a cost But improve abates, a low in it It's take switch. like is you really some in. to we're a products -- yes, to and throw going improves and XXXX. going And have it's phasing we in lot also that I in don't situation

Operator

of question comes the with Christopher line next Oppenheimer. Glynn Our from

Christopher Glynn

gave spent book-to-bill But lot of into orders. time EMG over Dave, And improvement EIG, orders on the sequential pattern for you XQ XQ little could for A of anything go there? the if further the year-over-year we wondering a EIG. maybe kind the on in sequential

David Zapico

Yes. and give company groups. there. of above it was what the whole The X both the That's book-to-bill X.XX, can for for I was you

Christopher Glynn

the That on then something what's covers fourth you in status high that. strong the talked have quarters had quarter? that that defense? in for last versus And guide. -- the is pretty couple update and about you all the defense a A&D mid-single-digit of you And quarter, delays, factored single-digit Is

David Zapico

Yes, we think growing, of that, it's for is that's timing had The us on That little QX. is but project QX, business good -- growing. there's because reverse, QX there's to excellent scheduled Yes. is going in some project and we it defense based. a and bit things and business

So and it be the can headed lumpy but in it's lumpy, right direction.

at looking you're So way. it the right

Christopher Glynn

Great.

asked, of actionability? coming Lastly, curious, pipeline, it I'm not small, mix But sure here. just multiple through companies deal the larger if was

David Zapico

sellers. credit feels like area Yes. got sizes, months. active. We the is obviously it X And little last than we're before, at were that mentioned cash maybe a bit deal in pipeline variety X I number facilities high a are starting and The a the remains they to in That's The looking deal or and what of have very more move things the of actively strong. recognized to by execute. We're deals. pipeline quality

Operator

next [Operator Andrew line Our of Bank comes of with Obin from question the America. Instructions]

Andrew Obin

by the was easiest a I wondering, you quarter, that my of lot to assume continue growth we're And last I was year don't you give questions would stack, -- quarter just macro. Look, reasonable on is QX. by when it guide fourth minus look, I from bottomed checking on to do X-year I just and but is QX third short-cycle X-year be investors, order But suggest just to sort goes minus just it guide it's organically go of that And I on we'll year. probably I'm a appreciate, orders, XX, in impact Dave, comp QX just math we decline. it, just right, correct. we'll stack, get if do of, And we've the is I it orders that to it, back If names? orders. getting to X and these return for if it don't and for arithmetically, at look look And think know a could

have don't You I a crystal specialty appreciate these all things. ball.

David Zapico

that's Yes, right.

is anyone comment numbers. stack than on better can't else's. don't I no ball look at your numbers, X-year crystal But we so the Our

What comment I to healthy there's been increases QX. from that sequential can is QX

increase from -- also saw So to QX. sequential and QX a we

So along they the the X-year already, gave in sequential organic we up year-over-year on the the and numbers digits the quarter. with stack numbers mid-single were are --

encouraging an from that's our viewpoint. fact So

Andrew Obin

question I business. And a And it's But environment med world. can't and just time a another. than an on anyone's Could So timing move more good regulated in obviously, the follow-up more playbook just where as do of costs it a mean, fast from terms restructuring apply I restructuring? different how of expected. appreciate tech, things give Really as us this right? the facility on one you No. industrial of production on lot getting regulation. it's -- AMETEK to you the your in Paragon update out you in and a line playbook just is

approval. learned? of subject very just relative can't. are the And You -- Can high lessons sure, speed has what It's being restructuring -- I'm all you to to been expectations. regulatory what

David Zapico

that regulated, factories. have Yes, know and space that because another we because the the environment is we in we move business

business is a Paragon. sister to So EMG our business

adjusted we're just an business business you with move have experienced the bit a moving like aerospace it, longer, moving to regulatory slow, utility for our So is a just careful like moving takes or and to be have and when like defense and or it you timing very business. environment a just

So of for -- we That's markets. markets. really We lot It's in kind regulated of our This isn't us. like focus. regulated operate new a core.

to right. do our And does it take you If at look right, time. portfolio. we're whole going it but -- and you're

Operator

question TD of next comes Giordano the from Our with Cowen. line Joe

Joseph Giordano

still I in maybe to Just but like your balanced a OE you curious ship? assuming essentially Xs can quarter? very you taking like everything are or aero, into you are the consideration. the still Or there, X something like know Tier you fourth on mentioned selling you're is where exposure you're Boeing

David Zapico

levels confirmed I mean, Yes, supply right. the direct you've orders chain I lower think and that's is Yes. was anything where of we to got it the -- removed. if X have there

Joseph Giordano

or missed had apologies And I if late, revenue XXXX you contribution then bit it. this, but on I Got updated number? expect an that joined a number little a from you Paragon, did them give like

David Zapico

number thought quarter. what holds, line was gave sequential the a executed for them too. Paragon didn't with talk for and good the about that we quarter number. in And Paragon, last did they still It in No, also and give growing quarter orders they we this the

Operator

Partners. comes Sprague question from with Research the of Our Jeff next line Vertical

Jeffrey Sprague

follow-up. Dave, that kind an then we the in changing you And early any And part you just us -- can you're spread quick QX, give just of what cost seeing as update price the a and on on quarter? think do move really 'XX? into price of

David Zapico

it mean a to Jeff. got price, getting we positive spread Yes. we consistent the of XXX of question, from and quarter, points more In we're across it. the points P&L normal X got to back That's basis about pretty -- the portfolio, seems I good patterns. price

the are and in high the I points, you year, by the I inflation, to positive normal price where is And the X%. think number of always abating. if basis So the we're we X% are into XX the days spread think price/cost -- next like look normal higher

Operator

with question KBCM. Barger next line comes And from the our Steve of

Steve Barger

coming question there's investments bit some of recovery I due know I'll in a moderating expectations through. just are semi products, on consumer optimism slower ask still to cap but a feels the around a It lot leading-edge cycle. like

match deep leading is and you I your on the defect edge. But think as you're or in improves? does positioned, can more detection based cycle market the portfolio how outgrow equipment whatever

David Zapico

the in product we stuff the portfolio. have were -- And uniqueness lot and think and the mid-single one stuff example, digits, between thing gets for was of that during driven laboratory by then quarter, I was that about our I our worked -- that happens. and that the production up portfolio the the it on semiconductor is cycles we a growth the can. we the businesses semiconductor in -- had mean Yes, of

other. natural way and each either large they're there. a not And we swings in compensate, there's usually have correlated balance of with So that don't kind

with positive So I have it's dynamics a you China. market. mean some

dynamics You new have some with technology.

We as and have a product in our very quite CAMECA now. best-in-class business well is selling we're that's been unique developed

haven't planning the So were portfolio, the But technology anything, of that better. XXXX. X% we'll and for -- in if and a for that's yes, We technology, digits done market digits. about our semiconductor. up we mid-single be think up That's our getting year we or buys mid-single is

some and was that used we a Physics, an acquisition manufacturing in Polygon is small related source ion us in space. specifically semiconductor advanced the did, In fact, that technology gives to EUV capability

Steve Barger

Understood.

feel have and And Does know you but does so I we're the it do cycle high-volume like like the some production more feel for lab cycle. inflecting? it -- itself exposure,

David Zapico

see sit one. dynamics and I all out kind of then you and points, read there's but inflection some some feels mean things geopolitical what on there, Yes. back you the it industry and that like happens got

Operator

closing President hand any now remarks. back Relations of I'll Vice and Treasurer, over Kevin the Coleman for Investor call to

Kevin Coleman

accessed a call a Have for webcast and you, day. a Andrew, be of And in reminder, Investors as great today. of thanks, the replay ametek.com. can everyone, the joining our Thank section

Operator

This Ladies program, for does and gentlemen, thank you today's and you conclude disconnect. participating. may now

AMETEK (AME) 31 Oct 242024 Q3 Earnings call transcript