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Amphenol (APH) Beats on Q3 Earnings & Revenues, Raises View

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Amphenol (APH - Free Report) reported third-quarter 2018 adjusted earnings of 99 cents per share that beat the Zacks Consensus Estimate by a nickel and increased 19.3% from the year-ago quarter.

Net sales increased 15.7% year over year to $2.13 billion, which comfortably surpassed the Zacks Consensus Estimate of $2.01 billion.

Quarter Details

Revenues were driven by strong organic growth across most of Amphenol’s end markets, including mobile devices, military, IT and data communications, mobile networks, commercial air, industrial, and automotive.

Interconnect Products and Assemblies (94.8% of net sales) sales increased 16.6% from the year-ago quarter to $2.02 billion. Moreover, Cable Products and Solutions sales were $109.7 million, flat year over year.

Non-GAAP operating margin expanded 40 basis points (bps) on a year-over-year basis to 20.9%, driven by improved operational efficiency.

Segment wise, Interconnect Products and Assemblies operating margin increased 30 bps to 22.7%. However, Cable Products and Solutions operating margin remained unchanged at 13.1%.

Balance Sheet and Cash Flow

As of Jun 30, 2018, Amphenol had cash and cash equivalents worth $1.02 billion, higher than $964.4 million as of Jun 30, 2018.

Cash flow from operations was $339 million in the quarter.

During the quarter, the company repurchased approximately 0.4 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

For the fourth quarter of 2018, Amphenol projects sales between $2.06 billion and $2.10 billion. Adjusted earnings are expected between 96 cents and 98 cents per share.

For 2018, Amphenol now expects revenues of $8.04-$8.08 billion (up from the previous range of $7.82-$7.90 billion), indicating year-over-year increase of 15%.

Moreover, the company expects adjusted earnings of $3.68-$3.70 (up from previous range of $3.57-$3.61) per share, an increase of 18-19% year over year.

Zacks Rank & Stocks to Consider

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

Garmin (GRMN - Free Report) , Himax Technologies (HIMX - Free Report) and Vishay Intertechnology (VSH - Free Report) are some better-ranked stocks in the broader computer and technology sector. All three sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Garmin, Himax and Vishay is currently projected at 7.4%, 25% and 9.2%, respectively.

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