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Amphenol (APH) Q4 Earnings Beat Estimates, Revenues Rise Y/Y

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Amphenol’s (APH - Free Report) fourth-quarter 2021 adjusted earnings of 70 cents per share beat the Zacks Consensus Estimate by 11.1%. The figure increased 27.3% year over year.

Net sales increased 24.8% year over year to $3.03 billion and beat the consensus mark by 10.4%. Organically, net sales increased 18%.

The top line benefited from robust growth in the IT data communications, industrial, mobile networks, commercial air, automotive, and broadband end-markets.

Amphenol shares were down 2.7% following the results. Shares have returned 17% in the past year, outperforming the Zacks Computer & Technology sector’s gain of 1.6%.

Quarterly Details

Interconnect Products and Assemblies’ (96.2% of net sales) sales were up 24.9% from the year-ago quarter to $2.91 billion. Cable Products and Solutions' sales were $116.4 million, up 21.9% year over year.

Gross margin, on a GAAP basis, contracted 50 basis points (bps) year over year to 31.1%.

Selling, general and administrative expenses (SG&A), as a percentage of revenues, increased 10 bps on a year-over-year basis to 11%.

Adjusted operating margin contracted 50 bps on a year-over-year basis to 19.6%.

Balance Sheet

As of Dec 31, 2021, Amphenol had cash and cash equivalents worth $1.24 billion, higher than $1.30 billion as of Sep 30, 2021.

Total debt was $4.80 billion as of Dec 31, 2021 compared with $5.25 billion as of Sep 30, 2021.

During the quarter, the company purchased 2.1 million shares for $171 million. Amphenol also paid dividends of $87 million.

Acquisitions & Divestiture

In the reported quarter, Amphenol completed the acquisition of Halo Technology Limited and closed the divestiture of its MTS Test & Simulation business. Amphenol successfully completed seven acquisitions in 2021.

New Divisions

Amphenol created three new divisions, namely, Harsh Environment Solutions (“HES”), Communications Solutions (“CS”) and Interconnect and Sensor Systems (“ISS”), effective Jan 1, 2022.

HES, CS and ISS replace the company’s previous two reportable segments Interconnect Products and Assemblies; and Cable Products and Solutions.

Guidance

Amphenol expects first-quarter 2022 earnings between 59 cents and 61 cents per share, indicating 13% to 17% year-over-year growth. Revenues are anticipated between $2.690 billion and $2.750 billion, indicating 13-16% year-over-year growth.

The Zacks Consensus Estimate for first-quarter earnings is pegged at 59 cents, implying 13.5% growth from the figure reported in the year-ago quarter. The consensus mark for revenues stands at $2.62 billion, suggesting 10.3% growth from the year-ago quarter’s reported figure.

Zacks Rank & Stocks to Consider

Currently, Amphenol has a Zacks Rank #3 (Hold).

Littelfuse (LFUS - Free Report) , NETGEAR (NTGR - Free Report) and Mandiant (MNDT - Free Report) are some better-ranked stocks that investors can consider in the broader sector. All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Littelfuse shares have underperformed the Zacks Computer & Technology sector in the past year. Littelfuse returned 0.1% compared with sector’s rally of 4.3%. The company is set to report fourth-quarter 2021 on Feb 1, 2022.

NETGEAR shares have underperformed the Zacks Computer & Technology sector in the past year. NETGEAR shares are down 32.3%. The company is set to report fourth-quarter 2021 results on Feb 2.

Mandiant shares are down 32.7% in the past year. MNDT is set to report fourth-quarter 2021 results on Feb 8.


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