We recently reiterated our Neutral recommendation on Amphenol Corporation (APH).
Earnings estimates for 2012 have moved up after the company reported better-than-expected results for the first quarter of 2012 and upgraded guidance for full-year 2012.
Amphenol posted a net income of 77 cents per share in the first quarter of 2012, up from 69 cents in the fourth quarter of 2011 and 72 cents in the year-ago quarter. The reported net income beat the Zacks Consensus Estimate by a penny.
Sales came in at $982.0 million, up 4.4% year over year and 3.5% sequentially. Management’s guidance range was at $960 billion to $970 billion. The favorable movement in foreign currency exchange rates positively impacted sales by approximately $4 million in the first quarter of 2012 compared with the year-earlier quarter.
For 2012, Amphenol now projects revenues between $4.105 billion and $4.190 billion, up from its earlier estimate of $4.05 billion to $4.15 billion and an increase of 4% – 6% year over year. Earnings per share are expected between $3.30 and $3.38, an increase from the previous estimate of $3.23 and $3.34 and up 8% – 11% year over year.
Amphenol serves a variety of end-markets and the diversification in end markets enables the company to post strong results even in an uncertain economic environment. Amphenol is optimistic about the accelerating proliferation of new electronics in most of its end markets, which the company believes will propel demand with time. The ongoing revolution in electronics continues to create opportunities for Amphenol.
Meanwhile, the company recently increased its quarterly dividend to $0.105 per share from $0.015 per share. In the first quarter, Amphenol repurchased 1.5 million shares for $82 million, which leaves it with about 5.1 million shares remaining under its 20 million stock repurchase program, which expires in January 2014.
However, we would like to wait for a better entry point. Hence, we maintain our Neutral recommendation. In the short run, we have a Zacks #2 Rank on the stock, which translates into a short-term rating of Buy driven by the recent increase in outlook by management.
AMPHENOL CORP-A (APH): Free Stock Analysis Report
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