Back to top

Image: Bigstock

Amphenol (APH) Beats on Q1 Earnings, Raises 2017 Guidance

Read MoreHide Full Article

Amphenol Corporation (APH - Free Report) reported better-than-expected results for first-quarter 2017.

Over the last one month, shares of this Zacks Rank #3 (Hold) stock yielded a return of 1.70%, outperforming 1.32% growth recorded by the Zacks classified Electronics - Connectors industry.



Earnings and Revenues

Quarterly adjusted earnings came in at 71 cents per share, higher than the year-ago tally of 59 cents. In addition, the figure also beat the Zacks Consensus Estimate of 66 cents per share.

 

Quarterly revenues came in at $1,560.1 million, up 7.5% year over year. The company noted that this upside was stemmed by stronger information technology, military, automotive, data communications and industrial markets’ demand.  

The top line even surpassed the Zacks Consensus Estimate of $1,516 million.

Segmental Performance

Revenues of Interconnect Products and Assemblies segment came in at $1,463.5 million, up 7% year over year.

Sales of Cable Products and Solutions segment were $96.6 million, up 15.8% year over year.     

Costs and Margins

Cost of sales in the reported quarter came in at $1,044.2 million, up 5.3% year over year. Selling, general and administrative expenses increased 6.5% year over year to $201.8 million. Interest expense during the quarter was $19.3 million compared with $18.1 million reported in the year-ago quarter.

Gross profit margin came in at 33%, up 140 basis points (bps) year over year. Operating margin was 20.1%, up 360 basis points year over year.

Balance Sheet and Cash Flow

Amphenol had cash and cash equivalents worth $1,242.9 million as of Mar 31, 2017, compared to $1,034.6 million recorded at the end of 2016. Long-term debt came in at $2,862.1 million compared to $2,635.5 million recorded on Dec 31, 2016.

During first-quarter 2017, the company generated cash worth $237.8 million from operating activities as against $194.2 million recorded in the year-ago period. Purchases of land and depreciable assets during the quarter were valued at $48.7 million compared to $41 million recorded in the year-ago period.

Outlook

Amphenol is poised to grow on the back of latest acquisitions, business diversification and greater innovation. However, the company believes that negative foreign currency impact or unfavourable government policies might limit near-term growth. The company anticipates to accrue adjusted earnings within the range of 70–72 cents per share and revenues within the range of $1.580–$1.620 billion in second-quarter 2017.

The company raised its full-year 2017 revenue guidance to the $6.405–$6.525 billion range from the previous projection of $6.340–$6.500 billion. Adjusted earnings are expected to be in the range of $2.91–$2.97 per share, higher than the previously estimated range of $2.84–$2.92 per share.

Stocks to Consider

Some better-ranked stocks in the industry are listed below:

Applied Optoelectronics, Inc. (AAOI - Free Report) has an outstanding positive average earnings surprise of 116.49% for the trailing four quarters and boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Applied Materials, Inc. (AMAT - Free Report) currently carries a Zacks Rank #2 (Buy) and generated an average earnings surprise of 3.92% in the past quarters.

Adobe Systems Incorporated (ADBE - Free Report) currently carries a Zacks Rank #2 and has an average earnings surprise of 7.71% for the past quarters.

Looking for Ideas with Even Greater Upside?

Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more.

Click here for a peek at this private information >>

Published in