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Will Amphenol (APH) Beat Q4 Earnings on Improved Demand?
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Diversified electronics manufacturer Amphenol Corporation (APH - Free Report) is scheduled to report fourth-quarter 2017 results before the opening bell on Jan 24. In the last reported quarter, the company’s adjusted earnings beat the Zacks Consensus Estimate by 9 cents. Over the trailing four quarters, it delivered a positive average earnings surprise of 8.9%, beating estimates in each.
Let’s see how things are shaping up prior to this announcement.
Key Factors in the Quarter
Amphenol’s top-line growth is benefiting from improved end-market demand, new product rollouts and market share gains. Demand continues to be strong in automotive, industrial and military markets. The diversification in end markets, with consistent focus on technology innovation and customer support through all phases of the economic cycle has enabled the company to post solid results over the past few quarters. A sustained drive for geographic and market diversification has further helped Amphenol to expand its customer base and develop new applications.
In addition, Amphenol remains encouraged by its expanding presence in the fast-growing commercial aerospace market and is well positioned to capitalize on the proliferation of electronics content in next-generation planes. These advanced electronic systems require new advanced technology interconnect solutions to enhance fuel efficiency and improve passenger experience, all of which create excellent opportunities for the company.
Moreover, Amphenol generates solid cash flow, which allows management the opportunity to invest in product innovations, acquisitions and business development. Also, it has historically returned significant cash through a combination of share repurchases and dividend to reward shareholders with risk-adjusted returns. A balanced organic and inorganic growth model, a lean and flexible cost structure, and an agile and entrepreneurial management team is likely to translate into relatively higher revenues in the quarter.
Amphenol also has bullish revenue and earnings expectations. The ongoing revolution in electronics has enabled the company to capitalize on the opportunities and strengthen its position in the market. It further expects to leverage on the solid growth potential of the acquired companies to drive robust performance in the future.
For 2017, Amphenol expects sales in the range of $6,828 million to $6,868 million, representing a year-over-year increase of 9%. The company estimates adjusted earnings per share in the range of $3.19 to $3.21, an increase of 17-18% year over year. The Zacks Consensus Estimate for fourth-quarter revenues is currently pegged at $1,788 million.
Earnings Whispers
Our proven model conclusively shows that Amphenol is likely to beat earnings this quarter as it possesses the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is perfectly the case here as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +0.44% with the former pegged at 82 cents and the latter at 81 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Amphenol has a Zacks Rank #2. This increases the predictive power of ESP and makes us confident about an earnings surprise.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
AmerisourceBergen Corporation has an Earnings ESP of +1.50% and a Zacks Rank #2.
American Financial Group, Inc. (AFG - Free Report) has an Earnings ESP of +1.21% and a Zacks Rank #2.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Will Amphenol (APH) Beat Q4 Earnings on Improved Demand?
Diversified electronics manufacturer Amphenol Corporation (APH - Free Report) is scheduled to report fourth-quarter 2017 results before the opening bell on Jan 24. In the last reported quarter, the company’s adjusted earnings beat the Zacks Consensus Estimate by 9 cents. Over the trailing four quarters, it delivered a positive average earnings surprise of 8.9%, beating estimates in each.
Let’s see how things are shaping up prior to this announcement.
Key Factors in the Quarter
Amphenol’s top-line growth is benefiting from improved end-market demand, new product rollouts and market share gains. Demand continues to be strong in automotive, industrial and military markets. The diversification in end markets, with consistent focus on technology innovation and customer support through all phases of the economic cycle has enabled the company to post solid results over the past few quarters. A sustained drive for geographic and market diversification has further helped Amphenol to expand its customer base and develop new applications.
In addition, Amphenol remains encouraged by its expanding presence in the fast-growing commercial aerospace market and is well positioned to capitalize on the proliferation of electronics content in next-generation planes. These advanced electronic systems require new advanced technology interconnect solutions to enhance fuel efficiency and improve passenger experience, all of which create excellent opportunities for the company.
Moreover, Amphenol generates solid cash flow, which allows management the opportunity to invest in product innovations, acquisitions and business development. Also, it has historically returned significant cash through a combination of share repurchases and dividend to reward shareholders with risk-adjusted returns. A balanced organic and inorganic growth model, a lean and flexible cost structure, and an agile and entrepreneurial management team is likely to translate into relatively higher revenues in the quarter.
Amphenol also has bullish revenue and earnings expectations. The ongoing revolution in electronics has enabled the company to capitalize on the opportunities and strengthen its position in the market. It further expects to leverage on the solid growth potential of the acquired companies to drive robust performance in the future.
For 2017, Amphenol expects sales in the range of $6,828 million to $6,868 million, representing a year-over-year increase of 9%. The company estimates adjusted earnings per share in the range of $3.19 to $3.21, an increase of 17-18% year over year. The Zacks Consensus Estimate for fourth-quarter revenues is currently pegged at $1,788 million.
Earnings Whispers
Our proven model conclusively shows that Amphenol is likely to beat earnings this quarter as it possesses the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is perfectly the case here as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +0.44% with the former pegged at 82 cents and the latter at 81 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Amphenol Corporation Price and EPS Surprise
Amphenol Corporation Price and EPS Surprise | Amphenol Corporation Quote
Zacks Rank: Amphenol has a Zacks Rank #2. This increases the predictive power of ESP and makes us confident about an earnings surprise.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Apple Inc. (AAPL - Free Report) has an Earnings ESP of +1.82% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
AmerisourceBergen Corporation has an Earnings ESP of +1.50% and a Zacks Rank #2.
American Financial Group, Inc. (AFG - Free Report) has an Earnings ESP of +1.21% and a Zacks Rank #2.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>