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Amphenol (APH) Down 1.1% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Amphenol (APH). Shares have lost about 1.1% in that time frame, underperforming the S&P 500.

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

Amphenol's Q1 Earnings Beat Estimates, Revenues Rise Y/Y

Amphenol’s first-quarter 2023 adjusted earnings of 69 cents per share beat the Zacks Consensus Estimate by 2.99%. The earnings figure increased 3% year over year.

Net sales increased 0.7% year over year to $2.97 billion and beat the consensus mark by 3.3%. Organically, net sales increased 8%.

The top line benefited from robust growth across commercial air, broadband communications, military, industrial and automotive markets, as well as a solid contribution from acquisitions.

Quarterly Details

Harsh Environment Solutions’ (28.7% of net sales) sales were $854.2 million, up 17.4% from the year-ago quarter’s levels.

Communications Solutions’ (37.9% of net sales) sales were $1.13 billion, down 14.7% year over year.
 
Interconnect and Sensor Systems Solutions’ (33.4% of net sales) sales were $993.1 million, up 9.8% year over year.

Gross margin, on a GAAP basis, expanded 30 basis points (bps) year over year to 31.7%.

Selling, general and administrative expenses, as a percentage of revenues, increased 20 bps on a year-over-year basis to 11.6%.

Adjusted operating margin expanded 10 bps on a year-over-year basis to 20.1%.

Balance Sheet

As of Mar 31, 2023, Amphenol had cash and cash equivalents worth $1.50 billion, higher than $1.43 billion as of Dec 31, 2022.

Total debt was $4.56 billion as of Mar 31, 2023 compared with $4.58 billion as of Dec 31, 2022.

During the quarter, the company purchased 2.1 million shares for $167 million. It also paid dividends of $125 million.

Guidance

Amphenol expects second-quarter 2023 earnings between 66 cents and 68 cents per share, indicating a decline in growth between 9% and 12% year over year. Revenues are anticipated between $2.890 billion and $2.950 billion.

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How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

At this time, 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

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Amphenol has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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