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


Amphenol Corporation Price and EPS Surprise

Amphenol Corporation price-eps-surprise | Amphenol Corporation Quote


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.

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