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Amphenol (APH) Q3 Earnings Top Estimates, Revenues Up Y/Y

·3 min read

Amphenol’s APH third-quarter 2020 adjusted earnings of $1.09 per share beat the Zacks Consensus Estimate by 25.3%. Moreover, the figure increased 14.7% year over year.

Net sales increased 10.6% year over year to $2.323 billion and beat the consensus mark by 15.7%. Favorable foreign exchange aided sales by $17 million.

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

Quarterly Details

Interconnect Products and Assemblies’ (95.5% of net sales) sales were up 11.1% from the year-ago quarter to $2.221 billion. Moreover, Cable Products and Solutions sales were $101.5 million, up 1.7% year over year.

Gross margin on a GAAP basis expanded 10 basis points (bps) on a year-over-year basis to 31.6%.

Amphenol Corporation Price

 

Amphenol Corporation Price
Amphenol Corporation Price

Amphenol Corporation price | Amphenol Corporation Quote

Selling, general and administrative expenses (SG&A), as a percentage of revenues, decreased 60 bps on a year-over-year basis to 11.2%.

Adjusted operating margin expanded 80 bps on a year-over-year basis to 20.5%.

Segment-wise, Interconnect Products and Assemblies’ operating margin grew 70 bps on a year-over-year basis to 22.4%. Cable Products and Solutions’ operating margin expanded 50 bps to10.7%.

Balance Sheet and Cash Flow

As of Sep 30, 2020, Amphenol had cash and cash equivalents worth $1.46 billion, higher than $1.31 billion as of Jun 30, 2020. The company also repaid $1.3 million in debt.

During the quarter, the company repurchased 1.9 million shares of its common stock for $202 million and paid dividends of $75 million.

Amphenol’s board approved a 16% increase in quarterly dividend, from 25 cents to 29 cents per share. This dividend will be first paid on Jan 6, 2021, to holders on record as of Dec 15, 2020.

Guidance

Amphenol expects fourth-quarter earnings between 98 cents and $1 per share. Revenues are anticipated between $2.160 billion and $2.200 billion.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 95 cents, implying a 3.1% decline from the figure reported in the year-ago quarter. The consensus mark for revenues stands at $2.13 billion, suggesting a 1.1% fall from the year-ago quarter’s reported figure.

For 2020, Amphenol expects sales between $8.333 billion and $8.373 billion, reflecting growth in the 1-2% range over 2019. Earnings are expected between $3.59 and $3.61 per share, suggesting decline in the 3-4% range over 2019.

Zacks Rank & Other Stocks to Consider

Currently, Amphenol has a Zacks Rank #2 (Buy).

Avnet AVT, Avid AVID and Generac GNRC are a few other stocks worth considering from the broader computer and technology sector. All three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Moreover, all three stocks are set to report their quarterly results on Oct 28.

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