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Amphenol's (APH) Q2 Earnings Beat on End Market Strength
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Amphenol Corporation (APH - Free Report) delivered second-quarter 2018 adjusted earnings of 90 cents per share that beat the Zacks Consensus Estimate of 85 cents and increased 21.6% from the year-ago quarter.
Net sales increased 18.9% year over year to $1.981 billion, which comfortably surpassed the Zacks Consensus Estimate of $1.881 billion. Favorable currency exchange rate contributed $40 million in the quarter.
Revenues were driven by strong organic growth across most of Amphenol’s end markets, in particular, mobile devices, military, industrial, automotive, and commercial air. Management is also optimistic about its acquisition programs.
Interconnect Products and Assemblies (94.4% of net sales) revenues increased 19.9% from the year-ago quarter to $1.870 billion. Moreover, Cable Products and Solutions sales were $111.2 million, up 3.7% year over year.
Operating Details
Gross margin contracted 190 basis points (bps) from the year-ago quarter to 32.5%.
Non-GAAP operating margin however expanded 20 bps on a year-over-year basis to 20.6%, driven by improved operational efficiency.
Reported segment wise, Interconnect Products and Assemblies operating margin increased 10 bps to 22.4%. However, Cable Products and Solutions operating margin declined 170 bps to 13.2%.
Amphenol Corporation Price, Consensus and EPS Surprise
As of Jun 30, 2018, Amphenol had cash and cash equivalents worth $964.4 million, lower than $1.02 billion as of Mar 31, 2018.
Cash flow from operations was $395.3 million at the end of the second quarter.
During the quarter, the company repurchased approximately 3.1 million shares under the company’s $2 billion open market stock repurchase plan spanning three years.
The company paid dividends of $115.5 million during the quarter.
Guidance
Management is positive about the healthy demand environment across its end markets. However, uncertainties related to global trade policies might turn out to be a negative.
For the third quarter, Amphenol projects sales between $1.980 billion and $2.020 billion. Adjusted earnings are expected between 91 cents and 93 cents per share.
For full-year 2018, Amphenol now expects sales in the range of $7.820-$7.900 billion (up from the previous range of $7.630-$7.750 billion), indicating year-over-year increase of 12-13%. The company expects adjusted earnings in the range of $3.57-$3.61 (up from previous range of $3.49-$3.55), an increase of 14-16% year over year.
Long-term earnings growth rate for Micron, Twitter and Analog Devices is currently projected to be 8.2%, 23.1% and 12.4%, respectively.
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Amphenol's (APH) Q2 Earnings Beat on End Market Strength
Amphenol Corporation (APH - Free Report) delivered second-quarter 2018 adjusted earnings of 90 cents per share that beat the Zacks Consensus Estimate of 85 cents and increased 21.6% from the year-ago quarter.
Net sales increased 18.9% year over year to $1.981 billion, which comfortably surpassed the Zacks Consensus Estimate of $1.881 billion. Favorable currency exchange rate contributed $40 million in the quarter.
Revenues were driven by strong organic growth across most of Amphenol’s end markets, in particular, mobile devices, military, industrial, automotive, and commercial air. Management is also optimistic about its acquisition programs.
Interconnect Products and Assemblies (94.4% of net sales) revenues increased 19.9% from the year-ago quarter to $1.870 billion. Moreover, Cable Products and Solutions sales were $111.2 million, up 3.7% year over year.
Operating Details
Gross margin contracted 190 basis points (bps) from the year-ago quarter to 32.5%.
Non-GAAP operating margin however expanded 20 bps on a year-over-year basis to 20.6%, driven by improved operational efficiency.
Reported segment wise, Interconnect Products and Assemblies operating margin increased 10 bps to 22.4%. However, Cable Products and Solutions operating margin declined 170 bps to 13.2%.
Amphenol Corporation Price, Consensus and EPS Surprise
Amphenol Corporation Price, Consensus and EPS Surprise | Amphenol Corporation Quote
Balance Sheet and Cash Flow
As of Jun 30, 2018, Amphenol had cash and cash equivalents worth $964.4 million, lower than $1.02 billion as of Mar 31, 2018.
Cash flow from operations was $395.3 million at the end of the second quarter.
During the quarter, the company repurchased approximately 3.1 million shares under the company’s $2 billion open market stock repurchase plan spanning three years.
The company paid dividends of $115.5 million during the quarter.
Guidance
Management is positive about the healthy demand environment across its end markets. However, uncertainties related to global trade policies might turn out to be a negative.
For the third quarter, Amphenol projects sales between $1.980 billion and $2.020 billion. Adjusted earnings are expected between 91 cents and 93 cents per share.
For full-year 2018, Amphenol now expects sales in the range of $7.820-$7.900 billion (up from the previous range of $7.630-$7.750 billion), indicating year-over-year increase of 12-13%. The company expects adjusted earnings in the range of $3.57-$3.61 (up from previous range of $3.49-$3.55), an increase of 14-16% year over year.
Zacks Rank & Stocks to Consider
Currently, Amphenol has a Zacks Rank #3 (Hold)
Micron Technologies (MU - Free Report) , Twitter, Inc. and Analog Devices (ADI - Free Report) are better-ranked stocks in the broader sector. While Micron and Twitter sport a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Micron, Twitter and Analog Devices is currently projected to be 8.2%, 23.1% and 12.4%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>