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Why Is Amphenol (APH) Up 9.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for Amphenol (APH - Free Report) . Shares have added about 9.5% 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 Q4 Earnings Benefit from Strong End-Markets
Amphenol reported fourth-quarter 2018 adjusted earnings of $1.05 per share that beat the Zacks Consensus Estimate by seven cents and increased 22.1% from the year-ago quarter.
Net sales increased 14.4% year over year to $2.22 billion, which comfortably surpassed the Zacks Consensus Estimate of $2.09 billion. Unfavorable foreign exchange negatively impacted sales by $28 million.
Management stated that revenues beat guidance due to incremental sales of products into the mobile devices market.
Moreover, Amphenol recently completed the previously announced acquisition of SSI Controls Technologies. SSI is a leading designer and manufacturer of sensors and sensing solutions for the global automotive and industrial markets, with annual sales of approximately $180 million.
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, and broadband.
Interconnect Products and Assemblies (95.4% of net sales) sales increased 14.6% from the year-ago quarter to $2.12 billion. Moreover, Cable Products and Solutions sales were $102.3 million, up 12% year over year.
Consolidated operating margin remained flat on a year-over-year basis at 20.6%, driven by improved operational efficiency.
Segment wise, Interconnect Products and Assemblies operating margin increased 40 basis points (bps) to 22.8%. Moreover, Cable Products and Solutions operating margin expanded 80 bps to 11.9%.
Balance Sheet and Cash Flow
As of Dec 31, 2018, Amphenol had cash and cash equivalents worth $1.29 billion, higher than $1.02 billion as of Sep 30, 2018.
Cash flow from operations was $378 million compared with $339 million in the previous quarter.
During the quarter, the company repurchased approximately 3 million shares.
Guidance
For the first quarter of 2019, Amphenol projects sales between $1.898 billion and $1.938 billion. Adjusted earnings are expected between 86 cents and 88 cents per share.
Management expects first quarter sales to be negatively impacted by global economic uncertainties related to trade policy and weakness in the mobile devices end market.
For 2019, Amphenol expects sales of $8.190-$8.350 billion, indicating flat to 2% increase on a year-over-year basis.
Moreover, the company expects adjusted earnings of $3.88-$3.96 per share, an increase of 3-5% year over year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
Currently, Amphenol has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Amphenol has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Amphenol (APH) Up 9.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Amphenol (APH - Free Report) . Shares have added about 9.5% 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 Q4 Earnings Benefit from Strong End-Markets
Amphenol reported fourth-quarter 2018 adjusted earnings of $1.05 per share that beat the Zacks Consensus Estimate by seven cents and increased 22.1% from the year-ago quarter.
Net sales increased 14.4% year over year to $2.22 billion, which comfortably surpassed the Zacks Consensus Estimate of $2.09 billion. Unfavorable foreign exchange negatively impacted sales by $28 million.
Management stated that revenues beat guidance due to incremental sales of products into the mobile devices market.
Moreover, Amphenol recently completed the previously announced acquisition of SSI Controls Technologies. SSI is a leading designer and manufacturer of sensors and sensing solutions for the global automotive and industrial markets, with annual sales of approximately $180 million.
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, and broadband.
Interconnect Products and Assemblies (95.4% of net sales) sales increased 14.6% from the year-ago quarter to $2.12 billion. Moreover, Cable Products and Solutions sales were $102.3 million, up 12% year over year.
Consolidated operating margin remained flat on a year-over-year basis at 20.6%, driven by improved operational efficiency.
Segment wise, Interconnect Products and Assemblies operating margin increased 40 basis points (bps) to 22.8%. Moreover, Cable Products and Solutions operating margin expanded 80 bps to 11.9%.
Balance Sheet and Cash Flow
As of Dec 31, 2018, Amphenol had cash and cash equivalents worth $1.29 billion, higher than $1.02 billion as of Sep 30, 2018.
Cash flow from operations was $378 million compared with $339 million in the previous quarter.
During the quarter, the company repurchased approximately 3 million shares.
Guidance
For the first quarter of 2019, Amphenol projects sales between $1.898 billion and $1.938 billion. Adjusted earnings are expected between 86 cents and 88 cents per share.
Management expects first quarter sales to be negatively impacted by global economic uncertainties related to trade policy and weakness in the mobile devices end market.
For 2019, Amphenol expects sales of $8.190-$8.350 billion, indicating flat to 2% increase on a year-over-year basis.
Moreover, the company expects adjusted earnings of $3.88-$3.96 per share, an increase of 3-5% year over year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
Currently, Amphenol has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Amphenol has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.