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Why Is Amphenol (APH) Up 5% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Amphenol Corporation (APH - Free Report) . Shares have added about 5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Amphenol Beats on Q4 Earnings, 2017 View Bullish
Despite a challenging macroeconomic environment, diversified electronics manufacturer Amphenol reported strong fourth-quarter 2016 results with healthy year-over-year increases in both earnings and revenues. GAAP earnings for the reported quarter were $0.75 per share compared with $0.63 in the year-earlier quarter. The upside was primarily driven by higher revenues. GAAP earnings for the reported quarter exceeded the Zacks Consensus Estimate by $0.03.
Net income (GAAP) for the quarter came in at $235.4 million, compared with $200.1 million in the year-ago quarter. The year-over-year increase in GAAP earnings was largely attributable to top-line growth.
For full year 2016, Amphenol recorded GAAP earnings of $822.9 million or $2.61 per share compared with $763.5 million or $2.41 per share in 2015. Excluding non-recurring items, adjusted earnings for 2016 were $2.72 per share compared with $2.43 in 2015.
Revenues
The company recorded all-time high revenues of $1,651.1 million in fourth-quarter 2016 compared with $1,430.5 million in the year-ago quarter and ahead of the Zacks Consensus Estimate of $1,609 million. The improved revenue performance was mostly driven by organic growth across all markets, except mobile devices and commercial aerospace, along with healthy inorganic growth. For full year 2016, the company recorded revenues of $6,286.4 million compared with $5,568.7 million in 2015.
Operating margin reached record high of 20.5% for the quarter due to diligent cost-management efforts.
Segment Performance
Segment-wise, Cable business sales were $95.8 million in the reported quarter compared with $80.9 million in the year-ago quarter. Sales from the Interconnect business, which accounted for 94.2% of total sales were $1,555.3 million compared with $1,349.6 million in the prior year.
Operating income from the Interconnect business improved to $348.1 million during the quarter from $301.9 million a year ago. Operating income from the Cable business increased to $14.2 million from $10.1 million in the prior-year period.
Acquisition
In order to fuel its growth engine, Amphenol aims to acquire on a global basis in the high-growth segments that have complementary capabilities from a product, customer and/or geographic standpoint. Subsequent to the end of the quarter, the company acquired Phitek Systems Limited as a part of its strategic acquisition program. Based in New Zealand, Phitek Systems is a leading manufacturer of in-flight entertainment interconnect products for the commercial aerospace industry with annual sales of approximately $20 million. The company expects the acquisition to strengthen its global foothold and enhance its product offering in strategic markets.
Balance Sheet & Cash Flow
Amphenol generates solid cash flow, which gives management the opportunity to invest in product innovations, acquisitions and business development. At the same time, the company has historically returned significant cash through a combination of share repurchases and dividend to its shareholders. During the quarter, Amphenol repurchased approximately 1.5 million shares pursuant to its 2015 Stock Repurchase Program and completed the share buyback program. Subsequent to the end of the quarter, management authorized a new two-year stock repurchase plan for the purchase of up to $1 billion worth of shares.
Cash and cash equivalents were $1,034.6 million as of Dec 31, 2016 compared with $1,737.2 million in the prior-year period, while long-term debt (excluding current portion) was $2,635.5 million compared with $2,813.2 million at year-end 2015. Cash flow from operations for 2016 was $1,077.6 million compared with $1,030.5 million in the prior-year period.
2017 Guidance Bullish
Despite the uncertainties prevailing in the global economy, Amphenol has bullish revenue and earnings expectations. The ongoing revolution in electronics enables the company to capitalize on the opportunities and strengthen its position in the market. Amphenol also expects to leverage on the solid growth potential of the acquired companies to drive robust performance in the future.
Amphenol expects first-quarter 2017 sales in the range of $1.495 billion to $1.535 billion. GAAP earnings are expected to be in the range of $0.65 to $0.67 per share. For 2017, Amphenol expects sales in the range of $6.340 billion to $6.500 billion, representing a year-over-year increase of 1–3%. The company expects GAAP earnings per share in the range of $2.84 to $2.92, an increase of 9–12% year over year.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
At this time, Amphenol's stock has a nice score of 'B', on growth and momentum front. 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 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable for growth and momentum based on our styles scores.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Amphenol (APH) Up 5% Since the Last Earnings Report?
It has been about a month since the last earnings report for Amphenol Corporation (APH - Free Report) . Shares have added about 5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Amphenol Beats on Q4 Earnings, 2017 View Bullish
Despite a challenging macroeconomic environment, diversified electronics manufacturer Amphenol reported strong fourth-quarter 2016 results with healthy year-over-year increases in both earnings and revenues. GAAP earnings for the reported quarter were $0.75 per share compared with $0.63 in the year-earlier quarter. The upside was primarily driven by higher revenues. GAAP earnings for the reported quarter exceeded the Zacks Consensus Estimate by $0.03.
Net income (GAAP) for the quarter came in at $235.4 million, compared with $200.1 million in the year-ago quarter. The year-over-year increase in GAAP earnings was largely attributable to top-line growth.
For full year 2016, Amphenol recorded GAAP earnings of $822.9 million or $2.61 per share compared with $763.5 million or $2.41 per share in 2015. Excluding non-recurring items, adjusted earnings for 2016 were $2.72 per share compared with $2.43 in 2015.
Revenues
The company recorded all-time high revenues of $1,651.1 million in fourth-quarter 2016 compared with $1,430.5 million in the year-ago quarter and ahead of the Zacks Consensus Estimate of $1,609 million. The improved revenue performance was mostly driven by organic growth across all markets, except mobile devices and commercial aerospace, along with healthy inorganic growth. For full year 2016, the company recorded revenues of $6,286.4 million compared with $5,568.7 million in 2015.
Operating margin reached record high of 20.5% for the quarter due to diligent cost-management efforts.
Segment Performance
Segment-wise, Cable business sales were $95.8 million in the reported quarter compared with $80.9 million in the year-ago quarter. Sales from the Interconnect business, which accounted for 94.2% of total sales were $1,555.3 million compared with $1,349.6 million in the prior year.
Operating income from the Interconnect business improved to $348.1 million during the quarter from $301.9 million a year ago. Operating income from the Cable business increased to $14.2 million from $10.1 million in the prior-year period.
Acquisition
In order to fuel its growth engine, Amphenol aims to acquire on a global basis in the high-growth segments that have complementary capabilities from a product, customer and/or geographic standpoint. Subsequent to the end of the quarter, the company acquired Phitek Systems Limited as a part of its strategic acquisition program. Based in New Zealand, Phitek Systems is a leading manufacturer of in-flight entertainment interconnect products for the commercial aerospace industry with annual sales of approximately $20 million. The company expects the acquisition to strengthen its global foothold and enhance its product offering in strategic markets.
Balance Sheet & Cash Flow
Amphenol generates solid cash flow, which gives management the opportunity to invest in product innovations, acquisitions and business development. At the same time, the company has historically returned significant cash through a combination of share repurchases and dividend to its shareholders. During the quarter, Amphenol repurchased approximately 1.5 million shares pursuant to its 2015 Stock Repurchase Program and completed the share buyback program. Subsequent to the end of the quarter, management authorized a new two-year stock repurchase plan for the purchase of up to $1 billion worth of shares.
Cash and cash equivalents were $1,034.6 million as of Dec 31, 2016 compared with $1,737.2 million in the prior-year period, while long-term debt (excluding current portion) was $2,635.5 million compared with $2,813.2 million at year-end 2015. Cash flow from operations for 2016 was $1,077.6 million compared with $1,030.5 million in the prior-year period.
2017 Guidance Bullish
Despite the uncertainties prevailing in the global economy, Amphenol has bullish revenue and earnings expectations. The ongoing revolution in electronics enables the company to capitalize on the opportunities and strengthen its position in the market. Amphenol also expects to leverage on the solid growth potential of the acquired companies to drive robust performance in the future.
Amphenol expects first-quarter 2017 sales in the range of $1.495 billion to $1.535 billion. GAAP earnings are expected to be in the range of $0.65 to $0.67 per share. For 2017, Amphenol expects sales in the range of $6.340 billion to $6.500 billion, representing a year-over-year increase of 1–3%. The company expects GAAP earnings per share in the range of $2.84 to $2.92, an increase of 9–12% year over year.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
Amphenol Corporation Price and Consensus
Amphenol Corporation Price and Consensus | Amphenol Corporation Quote
VGM Scores
At this time, Amphenol's stock has a nice score of 'B', on growth and momentum front. 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 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable for growth and momentum based on our styles scores.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.