Altra Industrial Motion Posts Upbeat Q2 Results, Raises 2021 Guidance

Altra Industrial Motion (AIMC) reported stronger-than-expected Q2 results, topping both earnings and revenue estimates driven by strong demand and robust performance across all segments.

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Shares of the manufacturer of motion control, power transmission, and automation products have jumped 81.5% over the past year.

The company reported adjusted earnings of $0.89 per share, beating analysts’ expectations of $0.81 per share. Net sales of $488.6 million also exceeded the consensus estimate of $468 million.

Meanwhile, earnings per share jumped 48.3%, while net sales grew 21.9% on a year-over-year basis. The company reported earnings of $0.60 per share in the prior-year period. (See AIMC stock charts on TipRanks)

Organic sales growth was up 17.2% on a year-over-year basis despite the supply chain challenges faced during the quarter.

Segment-wise, Power Transmission Technologies organic sales grew 16.1%, while Automation & Specialty organic sales were up 18%.

Altra’s CEO Carl Christenson commented, “The incoming order rate remains extremely strong, and our backlog is up significantly to an all-time high, positioning Altra well for the coming quarters. We’re also excited by the level of business development happening across our businesses as we work with customers to develop innovative solutions that are expected to drive future growth in attractive verticals such as medical, factory automation and robotics.”

Raised 2021 Guidance

Based on strong Q2 results and demand momentum, the company is raising its guidance for Fiscal 2021. The company now forecasts adjusted earnings in the range of $3.30 to $3.46 per share, while the consensus estimate is pegged at $3.24 per share. The company previously forecast EPS to range between $3.09 and $3.24 per share.

Sales are forecast to be in the range of $1.89 to $1.92 billion, versus the consensus estimate of $1.86 billion. Revenues were previously forecast to be in the range of $1.82 to $1.85 billion.

However, CEO Christenson added, “At the same time, we expect to continue facing inflationary pressure on raw materials, labor and logistics. Looking further ahead, we believe our strong position in growth markets, our talented team and our business system provide us with the ability to maintain a growth trajectory through 2022 and beyond,” concluded Christenson.”

Following the results announcement, Rosenblatt Securities analyst Scott Graham reiterated a Hold rating on the stock with the price target of $65 (4.5% upside potential).

Graham forecasts the company to report earnings of $0.61 per share for the third quarter of 2021.

Consensus among analysts is a Strong Buy based on 3 Buys and 1 Hold. The average Altra Industrial Motion price target of $71.25 implies 14.55% upside potential to current levels.