Where Amphenol Corporation (APH) Stands In Terms Of Earnings Growth Against Its Industry
Today I will take a look at Amphenol Corporation’s (NYSE:APH) most recent earnings update (30 September 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the electronic equipment, instruments and components industry performed. As an investor, I find it beneficial to assess APH’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. Check out our latest analysis for Amphenol
How Well Did APH Perform?
For the most up-to-date info, I use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method enables me to analyze different companies on a similar basis, using the latest information. For Amphenol, the latest twelve-month earnings is $989.3M, which, in comparison to the previous year’s figure, has risen by 25.59%. Since these values are somewhat nearsighted, I’ve calculated an annualized five-year figure for Amphenol’s net income, which stands at $671.1M. This suggests that, on average, Amphenol has been able to consistently grow its net income over the past couple of years as well.
What’s the driver of this growth? Let’s take a look at if it is merely because of an industry uplift, or if Amphenol has seen some company-specific growth. Over the past few years, Amphenol expanded its bottom line faster than revenue by successfully controlling its costs. This has caused a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US electronic equipment, instruments and components industry has been growing its average earnings by double-digit 12.68% in the past year, and 13.42% over the previous few years. This shows that any tailwind the industry is deriving benefit from, Amphenol is capable of amplifying this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Amphenol gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Amphenol to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for APH’s future growth? Take a look at our free research report of analyst consensus for APH’s outlook.
2. Financial Health: Is APH’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
