APH Q4 2022 Earnings

Call Details

• Call Title: Amphenol Corporation Q4 2022 Earnings Call
• Date: January 25, 2023 at 6:00 PM UTC
• Management Team:
  • Craig Lampo (Chief Financial Officer)
  • Adam Norwitt (Chief Executive Officer)

Call Summary

Financial Performance

• Fourth quarter sales were $3,239,000,000, which was up 7% in U.S. dollars, 11% in local currencies, and 8% organically versus Q4 2021.
• Full year 2022 sales were a record $12,623,000,000, which was up 16% in U.S. dollars, 19% in local currencies, and 15% organically versus 2021.
• Fourth quarter GAAP diluted EPS from continuing operations was $0.82 and adjusted diluted EPS was $0.78, representing year-over-year increases of 14% and 11%, respectively.
• Full year GAAP diluted EPS was $3.06 and adjusted diluted EPS was $3.00, which were increases of 22% and 21%, respectively, versus 2021.
• Fourth quarter adjusted operating margin was 20.9% and GAAP operating margin was 20.6%, with GAAP including approximately $10 million of acquisition-related costs.
• Fourth quarter EBITDA was $798,000,000 and full year 2022 EBITDA was $3,100,000,000, and net leverage at year-end was 1.0 times.
• Fourth quarter operating cash flow was a record $705,000,000 and free cash flow was $613,000,000, and full year operating cash flow and free cash flow were $2,175,000,000 and $1,796,000,000, respectively.
• Working capital metrics at quarter end were inventory days of 86, days sales outstanding of 73, and payable days of 54.

Guidance

• For the first quarter of 2023, the company expects sales in the range of $2,840,000,000 to $2,900,000,000 and adjusted diluted EPS in the range of $0.65 to $0.67.
• The Q1 2023 outlook implies a sequential sales decline of 2% to 4% and adjusted diluted EPS of flat to down 3% versus Q1 2022, assuming market conditions do not meaningfully worsen and constant exchange rates.
• The company expects the adjusted effective tax rate for 2023 to be approximately 24%.
• The company expects quarterly interest expense in 2023 to be approximately $40,000,000 based on current and near-term expected interest rates and debt levels.
• The signed RFS asset acquisition (expected ~$100,000,000 of sales in 2023) is expected to close by end of Q2 2023 and is explicitly excluded from the Q1 guidance.
• Company guidance calls out sizable seasonal or sub-seasonal reductions in specific end markets, including an anticipated roughly 35% sequential decline in mobile devices and roughly 20% sequential decline in IT Datacom in Q1 2023.
• The company expects industrial sales in Q1 2023 to be roughly flat sequentially to Q4 2022 and expects a high-single-digit sequential moderation in automotive in Q1 2023 from high 2022 levels.