Amphenol Corp. (APH) reported sales of $771.0 million in the first quarter of 2010, up 17% from a year ago. Currency translation effect positively impacted sales by approximately 2% or $15 million in the first quarter of 2010, compared to the year-ago quarter.
Based in Connecticut , Amphenol designs, manufactures, and markets electronic and fiber optic connectors, cable and interconnect systems.
The growth in sales in the reported quarter was driven by strengthening demand in a diverse range of end-markets, which include – Information Technology and Data Communications Equipment, Automotive, Industrial, and Broadband.
Product wise, Interconect products generated sales of $703.6 million, up 14.4% year over year. Cable products generated sales of $67.4 million, up 16.0% year over year.
Gross margin improved to 32.3% from 31.3% in the year-ago quarter. Operating margin improved to 18.8% in the quarter from 18.3% in the previous quarter and 16.8% in the year-ago quarter.
Earnings per share (EPS) came in at 56 cents, including benefits relating to a reduction in tax expense for tax reserve adjustments primarily related to the completion of the audits of certain prior year tax returns. Excluding these items, EPS was 55 cents, beating the Zacks Consensus Estimate of 51 cents, as well as the year-ago result of 41 cents.
During the quarter, Amphenol generated $114 million of cash from operations. In April, Amphenol acquired an Asian manufacturer of specialty industrial interconnect products with sales of approximately $25 million.
Amphenol ended the quarter with cash and equivalents of $431.7 million, up from $384.6 million in the year-ago quarter. As of Mar 31, 2010, total debt was $801.9 million, up from $753.4 million at the end of the year-ago quarter.
Going forward, management expects the world economy to improve giving it an opportunity to expand business. Management projects revenues between $820 million and $835 million in the second quarter. EPS is forecasted between 60 cents and 62 cents.
Given signs of recovery and revival of demand in most of the end-markets of Amphenol, we reiterate our Outperform rating on the stock.
Read the full analyst report on “APH”
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