Amphenol Corporation (APH) is expected to report results for the third quarter of 2010 on October 20, 2010.
Based in Connecticut, Amphenol designs, manufactures and markets electronic and fiber optic connectors, cable and interconnect systems.
Amphenol expects sales between $880 million and $895 million in the third quarter. EPS is projected to be between $0.67 and $0.69.
Estimates for 2010 have been more or less static in the last thirty days with modest upward revisions. The current Zacks Consensus Estimate for 2010 is an EPS of $2.63, with an upside potential of 0.76%. The current Zacks Consensus Estimate for 3Q10 is 68 cents with an upside potential of 1.47%, in line with management’s guidance.
Amphenol has consistently reported numbers that have beaten expectations. In the second quarter, Amphenol reported an EPS of 68 cents, beating the Zacks Consensus Estimate by 11.48%. On average, Amphenol has come ahead of the Zacks Consensus Estimate by 8.69% in the last four quarters.
Second quarter results were strong, driven by strengthening demand in a diverse range of end-markets. At the end of the second quarter, management was encouraged by the improvement in overall economic conditions, which drove strong orders for the third quarter.
Amphenol’s top-line growth is benefiting from an 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. The automotive business is also showing signs of revival.
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 fast growing sub-markets such as PDAs, laptops and desktop computers.
However, though Amphenol was encouraged by improvement in overall economic conditions, demand is still not very strong and firm. Hence, we would like to wait for capital spending to pick up pace and volume, expected by mid-2011.
We continue to maintain a Neutral recommendation on Amphenol, supported by a Zacks #3 Rank, which translates into a short-term rating of Hold.
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