) reported stellar second-quarter 2014 results with record earnings
and revenues on the back of solid organic and inorganic growth. Net
income for the reported quarter was $174.9 million or $1.09 per
share compared with $154.0 million or 95 cents a share in the
year-ago quarter. The reported earnings surpassed the Zacks
Consensus Estimate by 4 cents.
Amphenol Corporation - Earnings Surprise |
Impressive growth in the quarter was primarily attributable to
Amphenol's technology leadership and market and geographic
diversification. It further reflected the company's balanced
organic and inorganic growth model. This was achieved on the back
of a lean and flexible cost structure and an agile and
entrepreneurial management team.
Quarterly revenues were record high at $1,314.2 million in
second quarter 2014, up 16% year over year. The year-over-year
growth was led by strength across diversified markets served by the
company, which include automotive, commercial air, industrial,
mobile networks and IT and datacom markets. Revenues also improved
5% sequentially supported by growth in all the markets of the
company. In addition, accretive acquisitions contributed
significantly to the top-line growth.
Operating margin improved 70 basis points on a sequential basis
to 19.5%. The increase in operating margin was primarily due to
focused operational execution and stringent cost-cutting
business sales represented 7% of total sales in second quarter 2014
and were up 1.7% year over year to $91.8 million. Sales from the
business, which accounted for 93% of total sales, were up 16.9%
year over year to $1,222.3 million driven by accretive
Balance Sheet & Cash Flow
During the quarter, Amphenol purchased approximately 1.4 million
shares pursuant to its 10 million shares repurchase program which
expires in Jan 2015. Cash and cash equivalents stood at $1,080.1
million at quarter end compared with $886.8 million as of Dec 31,
2013. Long-term debt aggregated $1,542.9 million at Jun 30, 2014
compared with $1,431.4 million at year-end 2013.
Cash flow from operations for the first half of 2014 aggregated
$383.3 million versus $360.8 million in the year-ago period.
Amphenol increased its quarterly dividend by 25% during the quarter
to 25 cents per share to reward its shareholders with prudent
Despite the uncertainties prevailing in the global economy,
Amphenol is bullish about its revenue and earnings expectations.
The ongoing revolution in electronics enables the company to
capitalize on these opportunities and strengthen its position in
Amphenol projects sales between $1.320 billion and $1.350
billion in third-quarter 2014 and earnings per share between $1.12
and $1.15. For full year 2014, management increased its revenue
guidance from $5.110 billion and $5.200 billion to $5.210 billion
and $5.270 billion, representing a year-over-year rise of 13%-14%.
Recurring earnings per share for 2014 is pegged in a band of $4.35
to $4.41, up from earlier projections of $4.25 to $4.34,
representing a year-over-year increase of 13%-15%.
Amphenol currently has a Zacks Rank #2 (Buy). Other stocks that
look promising and are worth a look in the industry include
TE Connectivity Ltd.
Maxwell Technologies, Inc.
). All these stocks carry a comparable Zacks Rank #2 (Buy).
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