Amphenol (APH) Set to Report Q1 Earnings: What's in Store?
Amphenol Corporation APH is set to report first-quarter 2018 results on Apr 25.
In the trailing four quarters, the company delivered a positive average earnings surprise of 9.41%, beating estimates in each. In the last reported quarter, the company’s adjusted earnings surpassing the Zacks Consensus Estimate by a nickel.
Notably, Amphenol’s top-line has also outpaced the consensus mark in the trailing four quarters. In the last quarter, revenues came in at $1.94 billion, beating the Zacks Consensus Estimate of $1.79 billion and increased 17.6% from the year-ago quarter.
Management anticipates first-quarter 2018 revenues between $1.78 billion and $1.82 billion, while adjusted earnings between 78 cents and 80 cents per share.
Amphenol Corporation Price and EPS Surprise
Amphenol Corporation Price and EPS Surprise | Amphenol Corporation Quote
Let’s see how things are shaping up prior to this announcement.
Military, Aerospace, Industrial Growth to Moderate
Amphenol’s top-line growth is benefiting from improved end-market demand, new product rollouts and market share gains. Demand continues to be strong in automotive, industrial and military markets.
However, management expects sales in the military market to moderate from fourth-quarter level (up 11% year-over-year).
Moreover, Amphenol remains encouraged by expanding presence in the fast-growing commercial aerospace market. The company is well positioned to capitalize on the proliferation of electronics content in next-generation planes. These advanced electronic systems require new advanced technology interconnect solutions to enhance fuel efficiency and improve passenger experience, all of which create excellent opportunities for the company.
Nevertheless, sales in the commercial aerospace market is expected moderate (low single digit growth against 11% in the fourth-quarter) as helicopter and business jet procurement volume stabilize and as commercial jetliner production continues to grow moderately.
Further, the latest acquisition of Canada-based CTI Industries that manufactures high technology cable assemblies diversifies Ampehenol’s interconnect product portfolio, which will drive industrial market top-line growth. However, sales in the industrial market are also expected to moderate in the first quarter.
Automotive Growth to Continue
Automotive growth is anticipated to be sustained by a robust product portfolio. The company’s expanding range of interconnect sensor and antenna products are expected to drive sales.
Further, the latest acquisition of China-based Sunpool, a provider of high technology antennas for the Chinese automotive market, solidifies the company’s market position.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
Amphenol has a Zacks Rank #4 (Sell) and an Earnings ESP of -0.06%, which indicates an unlikely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are few stocks you may consider as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.
Western Digital WDC has an Earnings ESP of +2.30% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Paycom Software PAYC has an Earnings ESP of +0.33% and a Zacks Rank #1.
Xilinx XLNX has an Earnings ESP of +5.26% and a Zacks Rank #2.
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