Why Is Amphenol (APH) Up 5.6% Since Last Earnings Report?

A month has gone by since the last earnings report for Amphenol (APH). Shares have added about 5.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Amphenol due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Amphenol's Q4 Earnings Beat Estimates, Revenues Up Y/Y

Amphenol’s fourth-quarter 2023 adjusted earnings of 82 cents per share beat the Zacks Consensus Estimate by 6.49%. The earnings figure increased 5.1% year over year.

Net sales increased 2.7% year over year to $3.33 billion and beat the consensus mark by 5.89%. Organically, net sales decreased 1%.

The top line benefited from higher revenues across the commercial air, defense, automotive and IT datacom end-markets.

Quarterly Details

Harsh Environment Solutions’ (27.1% of net sales) sales came in at $900.3 million, up 13.2% from the year-ago quarter’s levels.

Communications Solutions’ (40.4% of net sales) sales were $1.35 billion, which decreased 6.3% year over year.

Interconnect and Sensor Systems Solutions’ (32.5% of net sales) sales were $1.08 billion, up 7.3% year over year.

Gross margin, on a GAAP basis, expanded 100 basis points (bps) year over year to 33.1%.

Selling, general and administrative expenses, as a percentage of revenues, increased 70 bps on a year-over-year basis to 11.8%.

Adjusted operating margin expanded 40 bps on a year-over-year basis to 21.2%.

Balance Sheet

As of Dec 31, 2023, Amphenol had cash and cash equivalents worth $1.66 billion, down from $1.73 billion as of Sep 30.

Total debt was $4.34 billion as of Dec 31, 2023 compared with $4.29 billion as of Sep 30, 2023.

During the quarter, the company purchased 1.3 million shares for $115 million. It also paid dividends of $126 million.

The company completed four acquisitions — TPC Wire & Cable, Airmar Technology, LID Technologies and PCTEL — in the reported quarter.

Guidance

Amphenol expects first-quarter 2024 earnings between 71 cents and 73 cents per share, indicating growth between 3% and 6% year over year. Revenues are anticipated between $3.04 billion and $3.10 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

Currently, Amphenol has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Amphenol has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Zacks Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.

This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Amphenol Corporation (APH) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.