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Amphenol (APH) Q1 Earnings Lag Estimates, Revenues Decline Y/Y

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Amphenol’s (APH - Free Report) first-quarter 2020 adjusted earnings of 71 cents per share missed the Zacks Consensus Estimate by 5.3% and also declined 20.2% from the year-ago quarter’s figure.

Although net sales decreased 4.9% year over year to $1.86 billion, the same was slightly better than the consensus mark of $1.85 billion. Unfavorable foreign exchange impacted sales by $19 million.

Topline was negatively impacted by production shutdown in China during February and production limitations imposed on other parts of the world in March.

Quarterly Details

Interconnect Products and Assemblies (95.5% of net sales) sales dipped 4.5% from the year-ago quarter to $1.78 billion. Moreover, Cable Products and Solutions sales were $83 million, down 13.4% year over year.
 

 

Gross margin contracted 200 basis points (bps) on a year-over-year basis to 30.1%.

Selling, general and administrative expenses (SG&A) as a percentage of revenues increased 100 bps on a year-over-year basis to 13%.

Adjusted operating margin contracted 300 bps on a year-over-year basis to 17%.

Segment wise, Interconnect Products and Assemblies’ operating margin shrank 290 bps on a year-over-year basis to 19.1% while Cable Products and Solutions’ operating margin contracted 340 bps to 7.6%.

Balance Sheet and Cash Flow

As of Mar 31, 2020, Amphenol had cash and cash equivalents worth $2.38 billion, higher than $908.6 million as of Dec 31, 2019.

Cash flow from operations was $384.3 million compared with $424 million in the previous quarter.

During the quarter, the company repurchased shares worth $257 million and paid roughly $74 million in dividends.

Guidance

Amphenol expects second-quarter earnings and revenues to decline on a sequential basis.

The Zacks Consensus Estimate for second-quarter earnings is pegged at 70 cents, implying 23.9% decline from the figure reported in the year-ago quarter. The consensus mark for revenues stands at $1.79 billion, suggesting an 11.1% fall from the year-ago quarter’s reported figure.

Zacks Rank & Stocks to Consider

Currently, Amphenol has a Zacks Rank #3 (Hold). Citrix Systems (CTXS - Free Report) , Advanced Micro Devices (AMD - Free Report) and Garmin (GRMN - Free Report) are a few better-ranked stocks in the broader computer and technology sector, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Citrix, AMD and Garmin are set to report quarterly results on Apr 23, 28 and 29, respectively.

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