It has been about a month since the last earnings report for Amphenol (APH Quick QuoteAPH - Free Report) . Shares have added about 4.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Amphenol due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Amphenol’s Q3 Earnings Beat Estimates, Revenues Up Y/Y

Amphenol’s third-quarter 2024 adjusted earnings of 50 cents per share beat the Zacks Consensus Estimate by 11.11%. The earnings figure increased 28.2% year over year.

Amphenol’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, which is commendable.

Net sales increased 26.2% year over year to $4.04 billion and beat the consensus mark by 7.11%. Organically, net sales increased 15%.

Quarterly Details

The top line benefited from higher revenues across the IT datacom, defense, commercial air, and mobile devices automotive end-markets. It also benefited from the APH’s acquisition program.

Harsh Environment Solutions’ (29.6% of net sales) sales came in at $1.19 billion, up 34.5% year over year.

Communications Solutions’ (41.7% of net sales) sales were $1.69 billion, which increased 31.8% year over year.

Interconnect and Sensor Systems Solutions’ (28.7% of net sales) sales were $1.16 billion, up 12.3% year over year.

Gross margin, on a GAAP basis, expanded 80 basis points (bps) year over year to 33.6%. 

Selling, general and administrative expenses, as a percentage of revenues, increased 30 bps on a year-over-year basis to 12.2%.

Adjusted operating margin expanded 100 bps on a year-over-year basis to 21.9%.

APH’s Balance Sheet Reflects High Debt Level

As of Sept. 30, 2024, Amphenol had cash and cash equivalents worth $1.58 billion, up from $1.3 billion as of June 30, 2024.

Total debt was $5.48 billion as of Sept. 30, 2024, compared with $3.86 billion as of June 30, 2024.

During the quarter, the company purchased 2.7 million shares for $176 million. It also paid dividends of $132 million.

Amphenol’s Q4 and 2024 Guidance Positive

Amphenol expects fourth-quarter 2024 earnings between 48 cents and 50 cents per share, indicating growth between 17% and 22% year over year. Revenues are anticipated between $3.95 billion and $4.05 billion, suggesting growth in the 19 range. 

For 2024, Amphenol expects earnings between $1.82 and $1.84 per share, indicating growth between 21% and 22% over 2023. Revenues are anticipated between $14.85 billion and $14.95 billion suggesting growth in the 18 range over 2023.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

The consensus estimate has shifted 7.37% due to these changes.

VGM Scores

Currently, Amphenol has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Amphenol has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.