Zacks_Analysts' Blog : Amphenol Beats by a Penny - Analyst Blog

Amphenol Corporation (APH) posted a net income of $0.72 per share in the first quarter of 2011, compared to $0.56 in the year-ago quarter, beating the Zacks Consensus Estimate by a penny. Net income jumped 30.1% year over year to $127.9 million.

Based in Connecticut, Amphenol designs, manufactures and markets electronic and fiber optic connectors, cable and interconnect systems.

Sales came in at $941 million, up 22.0% year over year but down 0.9% sequentially. The results beat management’s guidance range of $925 - $940 million and the Zacks Consensus Estimate of $937 million.

The favorable movement in foreign currency exchange rates positively impacted sales by approximately $6 million in the first quarter of 2011 compared with the year-earlier quarter.

The growth in sales in the reported quarter was attributable to strong demand for interconnect products, which was partially offset by a moderation in demand of broadband cable products.

Product-wise, Interconnect products generated sales of $891 million, up 24.7% year over year. Cable products generated sales of $63.1 million, down 6.4% year over year.

In terms of end-markets, Amphenol experienced strength across nearly all of its served markets primarily led by Mobile Devices, Industrial, Automotive and Military/Aerospace.

Gross margin came in at 32.4%, flat on a year-over-year basis but slightly down on a sequential basis. Operating margin improved to 19.8% in the quarter from 18.8% in the year-earlier quarter.

During the quarter, Amphenol generated $107.8 million of cash from operating activities and used $23.2 million in capital expenditures.

Amphenol ended the quarter with cash and cash equivalents of $592.9 million, up from $525.9 million, at the end of the previous quarter. Debt at the end of the quarter increased to $949.4 million from $799.6 million at the end of the previous quarter.

Guidance

On the basis of the improvement in global demand coupled with stabilization of demand patterns, Amphenol projects sales between $985 million and $1,000 million for the second quarter of fiscal 2011. Earnings per share are forecasted between $0.76 and $0.78.

For fiscal 2011, management now projected revenues between $3,955 million and $4,000 million, up from the previous estimate of $3,885 million and $3,960 million.  EPS is expected between $3.05 and $3.11, up from the previous estimate of $3.00 - $3.10.

The better-than-expected results and upgraded guidance should boost the stock price.