It has been about a month since the last earnings report for Amphenol (APH Quick QuoteAPH - Free Report) . Shares have added about 8.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Amphenol due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Amphenol's Q3 Earnings Beat Estimates, Revenues Rise Y/Y

Amphenol’s third-quarter 2022 adjusted earnings of 80 cents per share beat the Zacks Consensus Estimate by 6.67%.

The earnings figure increased 23.1% year over year and was better than our estimate of 74 cents.

Net sales increased 16.9% year over year to $3.29 billion and beat the consensus mark by 6.82%. Organically, net sales increased 18%.

The net sales figure was much better than our estimate of $3.08 billion.

The top line benefited from robust growth across all end markets and benefits from the acquisition program, partially offset by unfavorable forex.

Quarterly Details

Harsh Environment solutions’ (24.1% of net sales) sales were $793.8 million, up 12.3% from the year-ago quarter. Our estimate was pegged at $768.2 million.

Communications Solutions’ (46.1% of net sales) sales were $1.52 billion, up 19.4% year over year. Our estimate was pegged at $1.37 billion.

Interconnect and Sensor Systems Solutions’ (29.8% of net sales) sales were $983.4 million, up 17% year over year. Our estimate was pegged at $947.6 million.

Gross margin, on a GAAP basis, expanded 60 basis points (bps) year over year to 32.2%.

Selling, general and administrative expenses (SG&A), as a percentage of revenues, decreased 20 bps on a year-over-year basis to 11.1%.

Adjusted operating margin expanded 40 bps on a year-over-year basis to 20.7%.

Balance Sheet

As of Sep 30, 2022, Amphenol had cash and cash equivalents worth $1.25 billion, lower than $1.33 billion as of Jun 30, 2022.

Total debt was $4.75 billion as of Sep 30, 2022 compared with $4.86 billion as of Jun 30, 2022.

During the quarter, the company purchased 2.4 million shares for $170 million. Amphenol also paid dividends of $119 million.

Guidance

Amphenol expects fourth-quarter 2022 earnings between 73 cents and 75 cents per share, indicating 4-7% year-over-year growth. Revenues are anticipated between $3.090 billion and $3.150 billion, indicating 2-4% year-over-year growth.

For 2022, Amphenol expects earnings between $2.95 and $2.97 per share, indicating 19-20% year-over-year growth. Revenues are anticipated between $12.474 billion and $12.534 billion, indicating 15% year-over-year growth.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

Currently, Amphenol has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Amphenol has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.