APH Q3 2019 Earnings

Call Details

• Call Title: Amphenol Corporation Q3 2019 Earnings Call
• Date: 2019-10-23 17:00 UTC
• Management Team:
  • Craig Lampo (Chief Financial Officer)
  • Adam Norrid (Chief Executive Officer)

Call Summary

Financial Performance

• Third quarter sales were $2.10B, which were down 1% in U.S. dollars and flat in local currencies versus Q3 2018.
• Organic sales declined 6% in the quarter after excluding acquisitions and currency impacts.
• Adjusted diluted EPS was $0.95, which was down 4% year-over-year, while GAAP diluted EPS was $0.92, down 9% year-over-year.
• Adjusted operating income was $414M and adjusted operating margin was 19.7%, which was down 120 basis points versus Q3 2018 and down 60 basis points sequentially.
• Segment margins showed the cable business at 10.2% versus 13.1% a year ago, and the interconnect business at 21.7% versus 22.7% a year ago.
• Orders were $2.09B, resulting in a book-to-bill of 1 to 1 for the quarter.
• Adjusted EBITDA for the quarter was approximately $501M and adjusted net income represented 14% of sales.
• Working capital metrics were within range with inventory days at 79, DSO at 72, and payable days at 52 at quarter end.

Guidance

• Fourth quarter sales are guided to $1.96B to $2.00B and adjusted diluted EPS to $0.89 to $0.91, representing a Q4 sales decline of 10% to 12% versus prior year and an EPS decline of 13% to 15% versus prior year.
• Full year 2019 guidance is $8.35B to $8.75B in sales and adjusted diluted EPS of $3.65 to $3.67, which represent full year declines of roughly 2% in sales and 3% in adjusted EPS versus 2018.
• Guidance assumes constant exchange rates for the outlook period and company commentary cited currency as a meaningful drag on the delta to prior guidance.
• Military market full year growth is expected to be just above 20% based on higher defense demand and program execution.
• Mobile devices full year sales are now expected to decline in the mid-20% range, improved from prior guidance of approximately a 30% decline.
• Industrial market full year growth is now expected in the low single digits, marking a modest downgrade from prior expectations.
• IT/datacom full year sales are expected to decline in the low single digits, representing a modest upgrade versus prior commentary.
• Mobile networks are expected flat in U.S. dollars for the full year but down in the high single digits organically, and the company expects further sequential moderation in Q4 for this market.