Zacks_Analysts' Blog : Earnings Preview: Amphenol Corporation - Analyst Blog

Amphenol Corporation (APH) is expected to report second quarter results on July 20, 2011.

The company expects sales of $985 – $1,000 million in the quarter.  EPS is forecasted between $0.76 and $0.78.

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

However, earnings estimates for 2011 are down by a penny in the last seven days. Second quarter earnings estimates have been static of late.

We expect Amphenol to beat estimates yet again in the second quarter. The company has consistently met or exceeded expectations. On average, Amphenol has beaten the Zacks Consensus Estimate by 5.40% in the last four quarters. 

Gross margin has been under pressure in the last few quarters due to higher commodity costs.

Amphenol’s top-line growth is benefiting from improved end-market demand, new product rollouts, and market share gains. Most of the end-markets are poised to grow with signs of economic recovery. Demand continues to be strong in Information Technology, Data Communications Equipment, Industrial and Wireless Devices, along with a revival in the automotive business.

We remain particularly optimistic about Amphenol’s long-term growth prospects in the mobile devices business. Demand for mobile phones remains strong. Beyond mobile phones, the company continues to expand the use of its products into the fast growing sub-markets such as PDAs, laptops, and desktop computers. In addition, a rebound in commercial aerospace production (expected in 2011) will boost the company’s business driven by Airbus-A380 and Boeing-787.

We continue to maintain a Neutral recommendation on the stock, ahead of the second quarter results. Our recommendation is supported by Zacks #3 Rank which translates into a short-term rating of Hold.