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Amphenol (APH) Beats on Q3 Earnings, Raises 2017 Guidance

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

Earnings and Revenues

Quarterly adjusted earnings came in at 88 cents per share, surpassing the Zacks Consensus Estimate of 79 cents per share. Notably, the bottom line also came in higher than the year-ago tally of 73 cents per share.

Quarterly revenues came in at $1,840.8 million, beating the Zacks Consensus Estimate of $1,725 million. Also, the top line came in higher than the prior-year figure of $1,635.9 million.

Segmental Performance

Revenues of Interconnect Products and Assemblies segment came in at $1,731.5 million, up 12.2% year over year.

Sales of Cable Products and Solutions segment were $109.3 million, up 17.9% year over year.     

Amphenol Corporation Price, Consensus and EPS Surprise

 

Amphenol Corporation Price, Consensus and EPS Surprise | Amphenol Corporation Quote


Costs and Margins

Cost of sales in the reported quarter came in at $1,234.7 million, up 12.4% year over year. Gross profit margin the quarter came in at 32.9%, expanding 10 basis points (bps) year over year.

Selling, general and administrative expenses flared up 11.5% year over year to $228.2 million. Operating margin in the quarter was 20.5%, up 20 bps year over year. Interest expense during the quarter was $24.6 million compared with $18.1 million reported in the year-earlier quarter.

Balance Sheet and Cash Flow

Exiting the quarter, Amphenol had cash and cash equivalents worth $ 1,452.2 million, higher than $1,034.6 million recorded at the end of 2016. Long-term debt came in at $3,559.7 million, higher than $2,635.5 million recorded on Dec 31, 2016.

In the first nine months of 2017, the company generated cash worth $716.4 million from operating activities, as against $728.7 million recorded in the year-ago period. Capital expenditure came in at $155.8 million, as against $136.3 million recorded in the comparable period last year.

Outlook

Amphenol believes the electronics revolution will open up a number of new business opportunities going forward. The company is poised to grow on the back of acquisitions, business diversification and greater innovation.

However, Amphenol expects that negative foreign currency impact or unfavourable government policies might limit near-term growth. The company projects to generate fourth-quarter 2017 revenues within the range of $1,760-$1,800 billion. Also, adjusted earnings for the fourth quarter are estimated to lie within 79-81 cents per share.  

Notably, this Zacks Rank #2 (Buy) company raised its top- and bottom-line view for 2017. Full-year 2017 revenues are currently expected to lie in the band of $6,828-$6,868 billion, higher than the prior projection of $6,620-$6,700 billion. Adjusted earnings for 2017 are expected in the range of $3.19-$3.21 per share, higher than the $3.06-$3.10 per share range previously estimated.

Other Stocks to Consider

Top-ranked stocks in the same space are listed below:

Agilent Technologies, Inc. (A - Free Report) currently carries a Zacks Rank #2 and has an average positive earnings surprise of 13.98% for the last four quarters. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Apple Inc. (AAPL - Free Report) also holds a Zacks Rank #2 and generated an average positive earnings surprise of 3.82% over the trailing four quarters.

Analog Devices, Inc. (ADI - Free Report) , another Zacks Rank #2 stock, pulled off an average positive earnings surprise of 19.05% during the same time frame.

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