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Amphenol (APH) to Report Q3 Earnings: What's in the Cards?

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Amphenol (APH - Free Report) is set to report third-quarter 2019 results on Oct 23.

The company projects adjusted earnings between 86 cents and 88 cents per share. The Zacks Consensus Estimate for earnings stayed at 87 cents over the past 30 days.

Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average positive surprise being 3.1%.

Moreover, third-quarter sales are expected between $1.960 billion and $2 billion. During the second-quarter earnings call, management slashed 2019 guidance on global economic uncertainties and geopolitical tensions related to the U.S.-China trade war.

Amphenol expects demand for its solutions to be moderate across communications equipment, automotive and industrial end markets in second-half 2019. Management stated that uncertainty across the communications equipment market over China demand, following U.S. restrictions on sales to Huawei, is a major headwind.
 

Amphenol Corporation Price and EPS Surprise

Amphenol Corporation Price and EPS Surprise

Amphenol Corporation price-eps-surprise | Amphenol Corporation Quote

 

The consensus mark for third-quarter revenues currently stands at $1.99 billion, indicating a decline of 6.7% from the figure reported in the year-ago quarter.

Factors to Consider

Amphenol’s diversified end market, which lowers exposure to volatility in any industry, is likely to have benefited the company’s performance in the third quarter. Moreover, a strong defense spending environment, which is positively impacting the military end market, is likely to have contributed to the top line.

In fact, Amphenol’s buyouts of CONEC, Kopek, Bernd Richter, GJM Group, CTI, Ardent, All Sensors, SSI Controls, Aorora and Charles Industries have not only strengthened its portfolio but also expanded the consumer base. This is likely to have aided the upcoming quarterly results.

Notably, Amphenol projects third-quarter sales from the industrial end market to be better than the second-quarter results (sales were down 3%, and 8% excluding the contribution from acquisitions) on contributions from CONEC and Bernd Richter acquisitions.

We also believe that the company’s leading position in the interconnect and sensors markets is likely to have positively impacted industrial end-market sales.

However, the uncertain macroeconomic environment due to the U.S.-China trade war, the sluggish automotive market in Europe and Asia and continued weakness in mobile devices end market is likely to get reflected in the company’s top-line performance in the to-be-reported quarter.

What Our Model Says

According to the Zacks model, a company with a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates.

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

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 an earnings beat in their upcoming releases:

Commvault Systems (CVLT - Free Report) has an Earnings ESP of +2.66% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Facebook has an Earnings ESP of +5.01% and a Zacks Rank #3.

Avnet (AVT - Free Report) has an Earnings ESP of +2.68% and a Zacks Rank #3.

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