Amphenol Beats Expectations

Amphenol Corporation (APH - Analyst Report) posted net income of $0.85 per share in the second quarter of 2011, compared to $0.72 in the first quarter of 2011 and $0.74in the year-ago quarter.

This easily beat the Zacks Consensus Estimate of $0.77. Net income jumped 14.0% year over year to $147.7 million.

Based in Connecticut, Amphenol designs, manufactures and markets electronic and fiber optic connectors, cable and interconnect systems.

Sales came in at $1,018.0 million, up 15% year over year and 8% sequentially. The result beat management’s guidance range of $985 million to $1,000 million. The favorable movement in foreign currency exchange rates positively impacted sales by approximately $29 million in the second quarter of 2011, compared with the year-earlier quarter.

Product-wise, Interconnect products generated sales of $943.7 million, up 15.0% year over year. Cable products generated sales of $73.9 million, up 9.0% year over year.

In terms of end-markets, Amphenol experienced strength across nearly all of its served markets primarily led by Mobile Devices, Industrial, Automotive and Military/Aerospace.

Gross margin came in at 32.0%, down from 33.0% in the year-ago quarter and also down on a sequential basis. Operating margin improved to 21.1% from 19.8% in the previous quarter and 20.0% in the year-ago quarter.

During the quarter, Amphenol generated $104.5 million of cash from operating activities and used $22.6 million in capital expenditures. The company also repurchased 3 million shares in the quarter.

Amphenol ended the quarter with cash and cash equivalents of $611.2 million, up from $592.9 million at the end of the previous quarter. Debt at the end of the quarter increased to $1,157.6 million from $949.4 million at the end of the previous quarter.

Guidance

Amphenol projects sales between $1 billion and $1.015 billion for the third quarter of fiscal 2011. Earnings per share are forecasted between $0.77 and $0.78.

For fiscal 2011, management now projects revenues between $3.975 billion and $4.005 billion, compared to the previous range of $3,955 million to $4,000 million.  EPS is expected between $3.13 and $3.17, compared to the previous estimate of $3.05 – $3.11.

The better-than-expected results and upgraded guidance should boost the stock price. 

Read the full analyst report on APH