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Earnings call: Amphenol posts record Q3 sales, bullish on IT datacom

investing.com 23/10/2024 - 20:47 PM

Amphenol Corporation Reports Record Q3 2024 Results

Amphenol Corporation (NYSE: APH), a leading global provider of high-technology interconnect, antenna, and sensor solutions, announced a record-breaking third quarter in 2024 with sales reaching $4.39 billion, marking a 26% increase compared to the prior year. Adjusted diluted earnings per share (EPS) rose 28% to $0.50. The surge was largely due to substantial growth in various market segments, especially in IT datacom, which experienced an impressive 60% increase driven by heightened demand for AI applications.

Key Takeaways

  • Record sales of $4.39 billion, a 26% year-over-year increase.
  • Adjusted diluted EPS reached $0.50, up 28% from the previous year.
  • Record orders of $4.412 billion, with a book-to-bill ratio of 1.09:1.
  • Growth in segments such as Harsh Environment Solutions, Communications Solutions, and Interconnect and Sensor Systems.
  • Share repurchase of 2.7 million shares, returning $308 million to shareholders.

Company Outlook

  • Anticipated high single-digit sales increase in Q4 and over 80% growth for the full year 2024.
  • Continued capital investments to bolster growth in IT datacom and defense markets.
  • Acquisition of Lutze Europe completed, with plans to acquire Andrew businesses from CommScope in Q1 2025.
  • Projected Q4 sales between $3.95 billion and $4.50 billion, and adjusted diluted EPS of $0.48 to $0.50.

Bearish Highlights

  • Decline of 15% in the broadband market.
  • A more cautious outlook for Europe, particularly regarding automotive and industrial markets.
  • Expected decline in mobile devices market in Q1 2025.

Bullish Highlights

  • 60% year-over-year growth in IT datacom market.
  • 4% growth in the automotive market, with strong performance in Asia and North America.
  • 18% growth in the mobile devices market, anticipated high single-digit growth for the year.

Misses

  • No specific financial misses reported during the call.

Q&A Highlights

  • CEO Adam Norwitt praised the company’s agility and entrepreneurial spirit, while CFO Craig Lampo discussed elevated CapEx to support key growth areas.
  • Strong book-to-bill ratios in IT datacom and defense sectors provide solid investment confidence.

Amphenol's executives show high confidence in the company's strategic direction and growth potential, especially in the IT datacom sector, which benefits from rising AI application demand. Their broad product offerings and robust customer relationships across automotive and mobile devices are expected to enhance growth further.

InvestingPro Insights

  • Amphenol Corporation's (APH) robust Q3 results are bolstered by key metrics from InvestingPro, with a market capitalization of $82.48 billion.
  • Revenue growth over the last 12 months (as of Q2 2024) was 6.61%, with 18.2% quarterly growth in Q2 2024.
  • Gross profit margin of 33.24% and operating income margin of 21.1% emphasize effective cost management.
  • Dividend growth has been consistent over 12 years, supporting a yield of 0.99%.
  • The stock is trading near its 52-week high, reflecting positive investor sentiment about future growth, particularly in AI-driven IT datacom applications.



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