Tags: Amphenol | value | slide | APH

Amphenol Hit by Short-term Value Slide

By    |   Friday, 02 Dec 2011 01:22 PM

Electronics manufacturer Amphenol (APH) has experienced earnings growing at a 20 percent clip over the last five years. Now the stock is in a short-term value slide due to lowered expectations stemming from customer worry.

Amphenol produces electrical and electronic connectors plus a variety of cable types, including coaxial, fiber optics and ribbon cables. The company sells its products into a wide range of industries, including automotive, broadband, industrial, information technology, medical, military aerospace, and mobile devices and networks.

The largest sales sectors are information technology, military and aerospace, and mobile devices. Amphenol is the second-largest company in its industry.

For the first nine months of 2011, company revenues were $2.99 billion, up 15 percent from $2.6 billion for the first three quarters of 2010. Net income for the period was $2.36 per share up 13 percent from $2.08.

For full year 2011 the consensus earnings estimate is $3.03 per share, compared to $2.70 earned in 2010. The earnings estimate for 2012 is $3.17 per share.

Slowing expectations

Although Amphenol reported record sales and earnings for the 2011 third quarter, the company also issued lower guidance for the fourth quarter of the year. Full year revenue guidance was dropped to a midpoint of $3.92 billion, from the previously forecast $4 billion.

Net income guidance for the year was reduced to between $3.01 and $3.03 from the previous $3.07 to $3.11. In spite of the projected short-term slow down, Amphenol CEO Adam Norwitt expressed belief in the company's longer term growth prospects as the diverse range of industries served by the company require more interconnectivity in their products at higher rates of speed.

Following the earnings release, the analysts at Ticonderoga downgraded APH to neutral from buy. Three weeks later the same analysts again downgraded the stock to a sell rating.

The company next reports on Jan. 19.

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Electronics manufacturer Amphenol (APH) has experienced earnings growing at a 20 percent clip over the last five years. Now the stock is in a short-term value slide due to lowered expectations stemming from customer worry. Amphenol produces electrical and electronic...
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2011-22-02
Friday, 02 Dec 2011 01:22 PM
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