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Amphenol (APH) to Report Q1 Earnings: What's in the Cards?

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Amphenol (APH - Free Report) is set to report first-quarter 2020 results on Apr 22.

The Zacks Consensus Estimate for revenues is pegged at $1.89 billion, implying a decline of 3.5% from the figure reported in the year-ago quarter.

Moreover, the consensus mark for earnings declined 7.1% to 78 cents per share over the past 30 days, implying 12.4% decline from the figure reported in the year-ago quarter.

On Feb 24, Amphenol announced that due to the COVID-19 outbreak in China, it doesn’t expect to meet its first-quarter 2020 sales and adjusted earnings guidance provided on Jan 22.

The company had projected sales between $1.960 billion and $2 billion. Adjusted earnings were expected between 85 cents and 87 cents per share.

Notably, Amphenol’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average positive surprise being 4.24%.

Amphenol Corporation Price and EPS Surprise

Amphenol Corporation Price and EPS Surprise

Amphenol Corporation price-eps-surprise | Amphenol Corporation Quote

Let’s see how things have shaped up for the upcoming announcement.

Modest Sales Growth Across Most End Markets

Amphenol expects first-quarter sales growth to be moderate in the automotive, commercial aerospace, Information technology and data communications end markets.

However, sales are expected to decline in military, mobile devices and mobile networks end markets.

Further, slowing demand in Europe is expected to hurt first-quarter sales in the industrial end market.

Other Factors to Consider

Amphenol’s diversified end market lowers exposure to volatility in any industry. Moreover, the company’s strong portfolio, driven by buyouts of CONEC, Kopek, Bernd Richter, GJM Group, CTI, Ardent, All Sensors, SSI Controls, Aorora and Charles Industries, is expected to have aided the to-be-reported quarter’s results.

However, an uncertain macroeconomic environment due to the coronavirus outbreak, U.S.-China trade war and a sluggish automotive market in Europe and Asia are likely to get reflected in the company’s top-line performance in the to-be-reported quarter.

This along with unfavorable foreign exchange is expected to have hurt the top line.

Further, a slowing China economy is a concern. Notably, China’s GDP shrank 6.8% in the first quarter of 2020 due to coronavirus-induced lockdown. The contraction in the first quarter is the first decline since at least 1992, when official quarterly GDP records started, according to a Reuters report.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Amphenol has an Earnings ESP of 0.00% and a Zacks Rank #2. 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 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:

InterDigital, Inc. (IDCC - Free Report) has an Earnings ESP of +152% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Limelight Networks, Inc. has an Earnings ESP of +100.00% and a Zacks Rank #2.

Citrix Systems, Inc. has an Earnings ESP of +0.17% and a Zacks Rank #2.

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