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Amphenol (APH) to Report Q2 Earnings: What's in the Cards?

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Amphenol (APH - Free Report) is set to report second-quarter 2019 results on Jul 24.

Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 4.9%.

In the last reported quarter, Amphenol benefited from strong organic growth across the end markets, including military, commercial air, IT datacom, industrial and mobile networks.

Sales Growth Expected to Be Modest Sequentially

Amphenol projects second-quarter sales between $1.980 billion and $2.020 billion, implying year-over-year growth of 2-4%, at constant currency.
 

Amphenol Corporation Price and EPS Surprise

Amphenol Corporation Price and EPS Surprise

Amphenol Corporation price-eps-surprise | Amphenol Corporation Quote

 

However, top-line growth is expected to be modest sequentially due to weakness in the mobile devices end market. Further, challenging IT and data communications end markets are likely to hurt the company’s performance.

The Zacks Consensus Estimate for revenues is $2.01 billion, indicating growth of 1.5% from the figure reported in the year-ago quarter.

Moreover, adjusted earnings are expected between 91 cents and 93 cents per share, suggesting year-over-year growth of 1-3%. The consensus mark for earnings is unchanged at 93 cents over the past 30 days.

Portfolio Strength & Acquisitions to Drive Growth

Amphenol’s diversified end market, which lowers exposure to volatility of any industry, is a positive. Notably, in the first quarter, no end market contributed more than 21% to the company’s sales.

Strength in the military, commercial aerospace and industrial end markets are expected to drive growth in the to-be-reported quarter.

Amphenol is expected to benefit from a strong defense spending environment, which is positively impacting the military end market. This is likely to drive sales of the company on a sequential basis in the to-be-reported quarter.

The company’s leading position in the interconnect and sensors markets is expected to drive the top line in the industrial end market.

Moreover, Amphenol’s buyouts of CTI, Ardent, All Sensors, SSI Controls, Aorora and Charles Industries have not only strengthened its portfolio but also expanded consumer base. This is likely to aid the upcoming quarterly results.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Amphenol has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are a few other companies you may want to consider, as our model shows that these have the right combination of elements to post earnings beat in their upcoming releases:

Asure Software (ASUR - Free Report) has an Earnings ESP of +8.11% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Facebook (FB - Free Report) has a Zacks Rank #2 and an Earnings ESP of +0.61%.

CGI Group (GIB - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #2.

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