Amphenol (APH) to Report Q2 Earnings: What's in the Cards?
Amphenol APH is set to report second-quarter 2020 results on Jul 22.
Amphenol expects second-quarter earnings and revenues to decline on a sequential basis. The company reported earnings of 71 cents per share on net sales of $1.86 billion in the first quarter.
The Zacks Consensus Estimate for second-quarter revenues is pegged at $1.78 billion, implying a decline of 11.8% from the figure reported in the year-ago quarter.
Moreover, the consensus mark for earnings stayed at 64 cents per share over the past 30 days, implying a 30.4% decline from the figure reported in the year-ago quarter.
Notably, Amphenol’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing in the other two, the average surprise being 2.31%.
Amphenol Corporation Price and EPS Surprise
Let’s see how things have shaped up for the upcoming announcement.
Factors to Consider
Weak military, commercial aerospace and mobile devices sales primarily due to coronavirus-led factory closures and lower capacity are expected to have hurt Amphenol’s second-quarter top-line growth.
Moreover, sluggish automotive market in Europe and Asia is likely to get reflected in the company’s top-line performance in the to-be-reported quarter.
Markedly, declining demand for smartphones is a concern. Per a Reuters report, smartphone shipments in China declined 16% year over year in June, reflecting sluggish demand. In May, shipment declined more than 10%.
Nevertheless, IT data communications sales are expected to have benefited from a surge in orders despite coronavirus-led production challenges. Industrial segment is also expected to have benefited from strong demand for coronavirus-related medical equipment. This is likely to have negated weakness in oil & gas, heavy equipment and rail-mass transit.
Further, Amphenol’s diversified business model lowers volatility of individual-end markets and geographies. Moreover, acquisitions like Cablescan, XGiga and EXA Thermometrics are expected to have aided second-quarter performance.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Amphenol has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:
MSCI MSCI has an Earnings ESP of +1.34% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
FormFactor FORM has an Earnings ESP of +11.11% and a Zacks Rank #2.
AMETEK AME has an Earnings ESP of +3.96% and a Zacks Rank #2.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.