Amphenol Corp Earnings: Higher Expenses Shrinks Margins, Profit Declines

S&P 500 (NYSE:SPY) component Amphenol Corporation (NYSE:APH) reported its results for the fourth quarter. Amphenol designs and produces electronic and fiber optic connectors, interconnect systems, and coaxial and flat-ribbon cable.

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Amphenol Earnings Cheat Sheet for the Fourth Quarter.

Results: Net income for the diversified electronics company fell to $113.9 million (69 cents per share) vs. $131.1 million (74 cents per share) a year earlier. This is a decline of 13.2% from the year earlier quarter.

Revenue: Fell 0.1% to $948.7 million from the year earlier quarter.

Actual vs. Wall St. Expectations: APH reported adjusted net income of 73 cents per share. By that measure, the company beat the mean estimate of 70 cents per share. Analysts were expecting revenue of $932.3 million.

Quoting Management: Amphenol President and Chief Executive Officer R. Adam Norwitt stated “We are pleased to report strong performance in a very challenging environment in the quarter with fourth quarter sales of $949 million, operating income margin (excluding one-time items) of 18.5% and earnings per share (excluding one-time items) of $.73. Global markets have been impacted by a higher level of uncertainty related in part to the fiscal and budgetary issues in many developed economies.”

Key Stats:

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the fourth quarter of the last fiscal year, which saw revenue rise 25.3%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 3 cents in the third quarter, by 2 cents in the second quarter, and by one cent in the first quarter.

Gross margin shrank 1.6 percentage points to 31.1%. The contraction appeared to be driven by increased costs, which rose 2.2% from the year earlier quarter while revenue fell 0.1%.

The company has now seen net income fall in each of the last two quarters. In the third quarter, net income fell 1.9% from the year earlier quarter.

Looking Forward: Over the past ninety days, the average estimate for the first quarter of the next fiscal year has fallen from 73 cents per share to 72 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. In the past seven days, the average estimate for the fiscal year has declined from $3.03 per share to $3.02.

Competitors to Watch: Molex Incorporated (NASDAQ:MOLX), RF Industries, Ltd. (NASDAQ:RFIL), TE Connectivity Ltd. (NYSE:TEL), Thomas & Betts Corporation (NYSE:TNB), Methode Electronics Inc. (NYSE:MEI), Optical Cable Corporation (NASDAQ:OCCF), Spectrum Control, Inc. (NASDAQ:SPEC), CommScope, Inc. (NYSE:CTV), AVX Corporation (NYSE:AVX), and Belden Inc. (NYSE:BDC).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

 

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com