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.
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.
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.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>