Nigel Coe: Okay. Good. I couldn’t hear you. Okay. So maybe you could do the same process geographically, talk about what you’re seeing by geography. I’d be curious about Europe and China. And also, you gave some perspective on business performance. Maybe you could talk about — maybe just for a final point on 4Q, maybe talk about core growth and acquisition and contribution for 4Q?
Dave Zapico: Okay. Q4 and geography. Okay. I’ll go across the geographies. We had continued solid growth in the US, with the international slowing a bit. So I’ll unpack that a bit. The US was up mid-single-digits, with notable strength in our process business. Europe was down low single-digits, notable strength in process and our aerospace business, but weakness in automation. You mentioned China. Our China exposure was down 3%. Strong growth in process weakness in automation. And overall, Asia was down about 10%. So China did better than overall Asia, kind of about 9% of sales. So again, up in the US, slowing in international markets. And the second question you asked was on Q4 and the guide for Q4. And our sales will be up mid-single-digits.
We’ll grow in revenue. There are two factors impacting the earnings in Q4. One of them is a higher tax rate. And the second one is there’s some acquisition, integration costs and they’re related to the deals we completed. But we’re very confident in our guide for Q4.
Nigel Coe: I’m sorry, David, what is the core growth for 4Q?
Dave Zapico: Core growth for Q4 was low to mid-single-digits.
Nigel Coe: Okay. So that’s obviously acceleration from 3Q. What’s driving that acceleration?
Dave Zapico: I think we’re seeing some good demand on the EIG side from the typical year-end selling — year-end sales that we typically get of capital spending, plus the EIG business is performing well. So our aerospace and our process businesses are performing well, and that’s what driving the organic sales in Q4 to be higher than the organic sales in Q3.
Nigel Coe: Got it. That’s helpful. Maybe just one more for me. So obviously, Paragon, big deal. You’ve posed another smaller deal. You sound really bullish on the outlook as well. So it seems like the cut line is still pretty fertile. I mean are we seeing here a change in behavior from sellers that we see more willing sellers? Are we seeing any change in sort of multiples here? Any color on the market would be helpful.
Dave Zapico: Yes, I think it’s a little choppy in the market and people are reevaluating. And the interest rates are higher. So financing that debt on a continuing organization may be a challenge. And as I said, in the beginning of the year, our pipeline is strong. I would categorize our pipeline right now is very strong. We have a lot of attractive candidates we’re looking at. And I’m just bullish on being able to differentiate AMETEK’s performance over the next 12 to 24 months with our OpEx and our M&A.
Nigel Coe: Great. Thank you.
Operator: Our next question comes from Christopher Glynn with Oppenheimer. Your line is open
Christopher Glynn: Thank you. Good morning.
Dave Zapico: Good morning, Chris.
Christopher Glynn: I want to keep it going on Paragon a little bit. I think you listed as — for medical components and instruments. I’m wondering if it is the OEM and some of the instrument spaces? And also a little bit on ownership history and the deal process competitiveness and such.
Dave Zapico: Yes. When you think about Paragon, they’re largely selling to an OEM customer base, but they do sell some of their surgical instruments directly to the end customer, but it’s largely an OEM customer base. We purchased the business from American Securities. And from our view, they did an excellent job running the business and got a fantastic management team in place, a good growth strategy. And they’re — what they did is really position kind of a pure med tech play, by positioning this with some other parts of their portfolio. So we’re pretty excited about what we’re buying.
Christopher Glynn: Thanks for the added color.
Dave Zapico: Yes. Thank you, Chris.
Operator: Our next question comes from Peter Costa with Mizuho. Your line is open
Peter Costa: Good morning, everyone. This is Peter as on for Brett Linzey. So just coming back to orders. Could you provide some context during the monthly order cadence through the quarter and then moving into October? Have you been seeing anything concerning or anything tracking better than your internal expectations? Thank you.
Dave Zapico: No, I think the quarterly evolution of orders is about what we see. We mentioned our book-to-bill and things like that. And we started out in Q4 in line with what we need to deliver those results. So we had talked — in our last few earnings calls, we highlighted a couple of dynamics that would impact orders. And our orders have been very strong for an extended period of time. In fact, we averaged 18% organic growth in 2021 and 2022. And we had 12 consecutive quarters up to this quarter with positive book-to-bill. So as a result, we have a near record backlog. As we said, these dynamics are playing out as we anticipated.
Peter Costa: Perfect. Thank you.
Dave Zapico: Yes.
Operator: Our next question comes from Andrew Obin with Bank of America. Your line is open.
David Ridley-Lane: Hi. This is David Ridley-Lane on for Andrew Obin. Wondering, if you’ve seen …
Dave Zapico: Good morning, David.
David Ridley-Lane: Good morning. Wondering, if you’ve seen any impact from the higher interest rates on end market demand? And in particular, some of the other publicly traded test and measurement companies have mentioned project delays, particularly in China, have you seen anything along those lines?
Dave Zapico: Yes. As I mentioned, we were down about 3% organically in China, so there was some delays, but it wasn’t substantial. In terms of increasing interest rates, that’s one of the uncertainties that we’re clearly looking at. And it’s a very dynamic environment right now. And there are factors for sure, but we’re not seeing an impact on projects, proceeding or anything like that from the interest rates at this point.
David Ridley-Lane: Got it. And are you supply chain constrained at this point in your Aerospace and Defense businesses? Is that a sort of a limiter on growth accelerating and even greater overtime?
Dave Zapico: We are not supply chain limited in Aerospace at this time. Now the industry is dealing with some supply chain difficulties, but we’re not limited.
