Altra Industrial Motion Corp. AIMC reported better-than-expected third-quarter 2018 results wherein earnings surpassed estimates by 8.5%. This was the company’s third successive quarter of earnings beat, the last being 7.58% delivered in the second quarter.This machinery company’s non-GAAP earnings in the reported quarter were 64 cents per share, surpassing the Zacks Consensus Estimate of 59 cents. Notably, the bottom line increased 33.3% from the year-ago tally of 48 cents.Inside the HeadlinesIn the reported quarter, Altra Industrial Motion’s net sales were $228.5 million, reflecting growth of 6.5% from the year-ago tally. Also, the top line exceeded the Zacks Consensus Estimate of $226 million.Altra Industrial Motion Corp. Price, Consensus and EPS Surprise Altra Industrial Motion Corp. Price, Consensus and EPS Surprise | Altra Industrial Motion Corp. QuoteSales generated from material handling, turf & garden, metals and mining end markets drove net sales of the company in the quarter under review.The company reports revenues under the following heads/segments — Couplings Clutches & Brakes, Electromagnetic Clutches & Brakes, and Gearing. A brief snapshot of the segmental sales is provided below:Couplings Clutches & Brakes’ sales were roughly $118.7 million, reflecting year-over-year growth of 7.8%.Revenues generated from Electromagnetic Clutches & Brakes amounted to $57.9 million, dipping 0.7% from the year-ago quarter.Gearing revenues grew 12% year over year to $54.2 million.Margin ProfileIn the reported quarter, Altra Industrial Motion’s cost of sales grew 7.5% to $156.5 million. It represented 68.5% of net sales versus 67.8% in the year-ago quarter. Gross margin declined 70 basis points (bps) to 31.5%.Selling, general and administrative expenses increased 9.4% to $44.9 million and represented 19.6% of net sales. R&D expenses were $5.7 million versus $6 million in the year-ago quarter.Non-GAAP operating income in the reported quarter grew 18% year over year to about $26 million, with non-GAAP operating margin increasing 110 bps to 11.4%Balance Sheet & Cash FlowExiting the third quarter, Altra Industrial Motion’s cash and cash equivalents were $50.1 million, up 31.5% from $38.1 million in the second quarter. Long-term debt decreased 1.8%, sequentially to $255.2 million.In the third quarter, the company generated net cash of approximately $59 million from its operating activities, increasing 36.3% from the year-ago figure. Capital invested for purchasing of property, plant and equipment was $21.1 million versus $23.3 million a year ago. Free cash outflow in the reported quarter was $37.9 million, up 90%.During the first nine months of 2018, the company paid dividends of around $15 million.Few days before releasing results, the company’s board of directors approved the payment of a quarterly cash dividend of 17 cents per share to shareholders on record as of Dec 17, 2018. The disbursement of dividends will be made on Jan 3, 2019.OutlookFor 2018, Altra Industrial Motion anticipates benefiting from solid organic growth opportunities.The company raised projections for 2018, with sales of $1,155-$1,165 million versus the previous forecast of $920-$935 million. Non-GAAP earnings are expected to be $2.86-$2.91 per share, up from $2.45-$2.55 projected earlier.The tax rate is anticipated be around 23-25% while capital spending is expected to be approximately $34-$38 million (the previous forecast was $28-$30 million).Zacks Rank & Other Stocks to Consider Altra Industrial Motion currently sports a Zacks Rank #1 (Strong Buy).Some other top-ranked stocks in the same space are Tetra Tech, Inc. TTEK, Eaton Corporation, PLC ETN and Kadant Inc KAI. While Tetra Tech sports a Zacks Rank #1, Eaton and Kadant carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Tetra Tech surpassed estimates in each of the trailing four quarters with an average beat of 10.85%.Eaton exceeded estimates thrice in the trailing four quarters with an average beat of 2.87%.Kadant surpassed estimates in each of the trailing four quarters with an average beat of 13.95%.The Hottest Tech Mega-Trend of All Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.See Zacks' 3 Best Stocks to Play This Trend >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Altra Industrial Motion Corp. (AIMC): Free Stock Analysis Report Kadant Inc (KAI): Free Stock Analysis Report Eaton Corporation, PLC (ETN): Free Stock Analysis Report Tetra Tech, Inc. (TTEK): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research