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Amphenol Hits 52-Week High on Solid Q2 & Bullish Guidance
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Shares of diversified electronics manufacturer Amphenol Corporation (APH - Free Report) scaled a new 52-week high of $78.58 during yesterday’s trading session, before closing a tad lower at $78.49 for a healthy year-to-date return of 16.8%. Barring minor hiccups, Amphenol’s share price has steadily been on an uptrend since early July. This Zacks Rank #2 (Buy) stock has the potential for further price appreciation with long-term earnings growth expectation of 7.7%.
Growth Drivers
Amphenol reported all-time high second-quarter 2017 results with healthy year-over-year increase in both earnings and revenues. GAAP earnings for the quarter were $251.5 million or 80 cents per share compared with $206.5 million or 65 cents per share in the year-earlier quarter, primarily driven by higher revenues. Adjusted earnings for the quarter came in at $255.2 million or 81 cents compared with $206.5 million or 65 cents in the year-ago quarter. Adjusted earnings for the quarter exceeded the Zacks Consensus Estimate by 9 cents.
The company recorded all-time high revenues of $1,666.5 million compared with $1,548.2 million in the year-ago quarter and ahead of the Zacks Consensus Estimate of $1,604 million. The improved revenue performance was mostly driven by solid growth across automotive, military, industrial, information technology and data communications, and broadband markets, partially offset by lower demand in the mobile device market. The year-over-year revenue improvement was attributable to healthy organic and inorganic growth of the company.
The diversification in end markets, with a consistent focus on technology innovation and customer support through all phases of the economic cycle enabled the company to post solid performance over the past few quarters. A sustained drive for geographic and market diversification has further helped Amphenol to expand its customer base and develop new applications.
In addition, Amphenol remains encouraged by its expanding presence in the fast-growing commercial aerospace market and is well positioned to capitalize on the proliferation of electronics content in next-generation planes. These advanced electronic systems also require new higher technology interconnect solutions to enhance fuel efficiency and improve passenger experience, all of which create excellent opportunities for Amphenol.
Despite the uncertainties prevailing in the global economy, Amphenol has bullish revenue and earnings expectations. The ongoing revolution in electronics enables the company to capitalize on the opportunities and strengthen its position in the market. It also expects to leverage on the solid growth potential of the acquired companies to drive robust performance in the future.
For 2017, Amphenol currently expects sales in the range of $6.620 billion to $6.700 billion, representing a year-over-year increase of 5–7%. The company expects adjusted earnings per share in the range of $3.06 to $3.10, an increase of 13–14% year over year. This represents a healthy improvement from the prior guidance of $6.405 billion to $6.525 billion in sales and adjusted earnings of $2.91 to $2.97 per share.
Such a bullish outlook with continued growth impetus and core focus perhaps boosted investors’ confidence and catapulted its share price to a new 52-week high.
Altra Industrial has a long-term earnings growth expectation of 8%. It topped estimates in each of the trailing four quarters with an average positive earnings surprise of 16.95%.
Graco has a long-term earnings growth expectation of 10.3%. It topped estimates in all the trailing four quarters with an average positive earnings surprise of 23.95%.
Barnes has a long-term earnings growth expectation of 9%. It topped estimates in all the trailing four quarters with an average positive earnings surprise of 11.60%.
One Simple Trading Idea
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
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Amphenol Hits 52-Week High on Solid Q2 & Bullish Guidance
Shares of diversified electronics manufacturer Amphenol Corporation (APH - Free Report) scaled a new 52-week high of $78.58 during yesterday’s trading session, before closing a tad lower at $78.49 for a healthy year-to-date return of 16.8%. Barring minor hiccups, Amphenol’s share price has steadily been on an uptrend since early July. This Zacks Rank #2 (Buy) stock has the potential for further price appreciation with long-term earnings growth expectation of 7.7%.
Growth Drivers
Amphenol reported all-time high second-quarter 2017 results with healthy year-over-year increase in both earnings and revenues. GAAP earnings for the quarter were $251.5 million or 80 cents per share compared with $206.5 million or 65 cents per share in the year-earlier quarter, primarily driven by higher revenues. Adjusted earnings for the quarter came in at $255.2 million or 81 cents compared with $206.5 million or 65 cents in the year-ago quarter. Adjusted earnings for the quarter exceeded the Zacks Consensus Estimate by 9 cents.
The company recorded all-time high revenues of $1,666.5 million compared with $1,548.2 million in the year-ago quarter and ahead of the Zacks Consensus Estimate of $1,604 million. The improved revenue performance was mostly driven by solid growth across automotive, military, industrial, information technology and data communications, and broadband markets, partially offset by lower demand in the mobile device market. The year-over-year revenue improvement was attributable to healthy organic and inorganic growth of the company.
Amphenol Corporation Price and Consensus
Amphenol Corporation Price and Consensus | Amphenol Corporation Quote
The diversification in end markets, with a consistent focus on technology innovation and customer support through all phases of the economic cycle enabled the company to post solid performance over the past few quarters. A sustained drive for geographic and market diversification has further helped Amphenol to expand its customer base and develop new applications.
In addition, Amphenol remains encouraged by its expanding presence in the fast-growing commercial aerospace market and is well positioned to capitalize on the proliferation of electronics content in next-generation planes. These advanced electronic systems also require new higher technology interconnect solutions to enhance fuel efficiency and improve passenger experience, all of which create excellent opportunities for Amphenol.
Despite the uncertainties prevailing in the global economy, Amphenol has bullish revenue and earnings expectations. The ongoing revolution in electronics enables the company to capitalize on the opportunities and strengthen its position in the market. It also expects to leverage on the solid growth potential of the acquired companies to drive robust performance in the future.
For 2017, Amphenol currently expects sales in the range of $6.620 billion to $6.700 billion, representing a year-over-year increase of 5–7%. The company expects adjusted earnings per share in the range of $3.06 to $3.10, an increase of 13–14% year over year. This represents a healthy improvement from the prior guidance of $6.405 billion to $6.525 billion in sales and adjusted earnings of $2.91 to $2.97 per share.
Such a bullish outlook with continued growth impetus and core focus perhaps boosted investors’ confidence and catapulted its share price to a new 52-week high.
Other Stocks to Consider
Some other stocks worth considering in the same space include Altra Industrial Motion Corp. , Graco Inc. (GGG - Free Report) and Barnes Group Inc. (B - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Altra Industrial has a long-term earnings growth expectation of 8%. It topped estimates in each of the trailing four quarters with an average positive earnings surprise of 16.95%.
Graco has a long-term earnings growth expectation of 10.3%. It topped estimates in all the trailing four quarters with an average positive earnings surprise of 23.95%.
Barnes has a long-term earnings growth expectation of 9%. It topped estimates in all the trailing four quarters with an average positive earnings surprise of 11.60%.
One Simple Trading Idea
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today.
Learn more >>