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Amphenol (APH) Q1 Earnings Miss Estimates, Revenues Rise Y/Y

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Amphenol’s APH first-quarter 2021 adjusted earnings of 52 cents per share missed the Zacks Consensus Estimate by 49%. The figure increased 48.6% year over year.

Net sales increased 27.7% year over year to $2.377 billion and beat the consensus mark by 103.5%. Organically, net sales increased 23%.

The top line benefited from robust growth in the mobile devices, automotive, IT datacom and industrial end-markets.

Amphenol Corporation Price, Consensus and EPS Surprise

Amphenol Corporation Price, Consensus and EPS Surprise
Amphenol Corporation Price, Consensus and EPS Surprise

Amphenol Corporation price-consensus-eps-surprise-chart | Amphenol Corporation Quote

Quarterly Details

Interconnect Products and Assemblies’ (95.9% of net sales) sales were up 28.2% from the year-ago quarter to $2.28 billion. Moreover, Cable Products and Solutions sales were $97.1 million, up 17% year over year.

Gross margin on a GAAP basis expanded 50 basis points (bps) to 30.6% on a year-over-year basis.

Selling, general and administrative expenses (SG&A) as a percentage of revenues decreased 200 bps on a year-over-year basis to 11.1%.

Adjusted operating margin expanded 250 bps on a year-over-year basis to 19.6%.

Segment-wise, Interconnect Products and Assemblies’ operating margin grew 230 bps on a year-over-year basis to 20.6%. Cable Products and Solutions’ operating margin remained unchanged on a year-over-year basis at 0.4%.

Balance Sheet and Cash Flow

As of Mar 31, 2021, Amphenol had cash and cash equivalents worth $2.32 billion, higher than $1.70 billion as of Dec 31, 2020.

During the quarter, the company purchased 2.4 million shares of its common stock for $153 million, bringing total share repurchases under the 2018 stock repurchase program to 40.3 million shares, or $1.95 billion.

In April 2021, the company purchased the remaining authorized amount of common stock under its existing three-year, $2 billion stock repurchase plan. As a result, on Apr 27, 2021, the company’s board of directors approved a new three-year, $2 billion open market stock repurchase plan.

The company also paid dividends of $87 million, resulting in total capital returned to shareholders during the first quarter of $240 million.

Acquisitions

Amphenol completed the acquisitions of Euromicron and Cabelcon in the reported quarter. Based in Germany and with annual sales of around $25 million, Euromicron is a manufacturer of highly engineered fiber optic interconnect solutions for the mobile networks and IT datacom markets.

Based in Denmark with annual sales of around $25 million, Cabelcon is a designer and manufacturer of high-technology connectors and interconnect assemblies primarily for the broadband market.

On Apr 7, Amphenol completed the acquisition of MTS Systems, a leading global supplier of advanced test systems, motion simulators and precision sensors. The acquisition is expected to be 5 cents accretive to Amphenol’s earnings per share in the first 12 months after closing.

Guidance

Amphenol expects second-quarter 2021 earnings between 53 cents and 55 cents per share, indicating 33% to 38% year-over-year growth. Revenues are anticipated between $2.415 and $2.475 billion, indicating 22-25% year-over-year growth.

The Zacks Consensus Estimate for second-quarter earnings is pegged at 51 cents, implying 24.3% growth from the figure reported in the year-ago quarter. The consensus mark for revenues stands at $2.28 billion, suggesting 14.6% growth from the year-ago quarter’s reported figure.

Zacks Rank & Stocks to Consider

Currently, Amphenol has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are AMETEK AME, CDW Corporation CDW and Cognex Corporation CGNX, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AMETEK, CDW and Cognex are scheduled to report their first quarter results on May 4, 5 and 6, respectively.

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