10-QPeriod: Q2 FY2020

AMPHENOL CORP /DE/ Quarterly Report for Q2 Ended Jun 30, 2020

Filed July 24, 2020For Securities:APH

Summary

Amphenol Corporation's (APH) second quarter 2020 results show resilience despite the challenging economic environment brought on by the COVID-19 pandemic. While net sales experienced a slight decrease of 1% year-over-year to $1.99 billion, the company demonstrated strong operational management, with earnings per share (EPS) at $0.85, down from $0.93 in the prior year but still robust. The company has effectively managed its working capital and maintained a strong liquidity position, with cash and cash equivalents totaling $1.31 billion at the end of the quarter. Management's proactive approach to navigating the pandemic's impacts, including supply chain disruptions and shifts in customer demand, highlights the company's adaptability. Despite a near-term slowdown in certain end markets like automotive and commercial aerospace, Amphenol's diversified product portfolio and global reach position it to capitalize on recovery trends and continued demand in sectors such as information technology and data communications.

Financial Highlights

53 data points
Beta

Revenue

$1.99B

30.4% Gross Margin

Net Income

$257.70M

13.0% Net Margin

EPS (Diluted)

$0.21

Total Assets

$11.20B

Cash & Equivalents

$1.29B

Free Cash Flow

$300.60M

Financial Statements
Beta
Revenue$1.99B
Cost of Revenue$1.38B
Gross Profit$603.80M
SG&A Expenses$246.40M
Operating Income$357.40M
Interest Expense$30.20M
Net Income$257.70M
EPS (Basic)$0.21
EPS (Diluted)$0.21
Shares Outstanding (Basic)1.19B
Shares Outstanding (Diluted)1.22B

Key Highlights

  • 1Net sales for the second quarter of 2020 were $1,987.5 million, a slight decrease of 1% year-over-year, impacted by the COVID-19 pandemic.
  • 2Diluted earnings per share (EPS) was $0.85, down from $0.93 in the prior year's second quarter.
  • 3The company maintained a strong liquidity position with $1,314.0 million in cash, cash equivalents, and short-term investments as of June 30, 2020.
  • 4Operating income decreased to $357.4 million, representing an operating margin of 18.0%, down from 19.8% in the prior year.
  • 5The Interconnect Products and Assemblies segment, representing about 96% of net sales, saw a 1% decrease in sales, impacted by automotive and aerospace markets.
  • 6The Cable Products and Solutions segment experienced a 1% decrease in sales.
  • 7Amphenol managed its working capital effectively, with an increase in operating cash flow to $752.4 million for the first six months of 2020.

Frequently Asked Questions

The COVID-19 pandemic caused widespread disruptions, including government-imposed operational limitations, supply chain interruptions, and reduced customer demand. These factors led to a slight decrease in net sales and operating income compared to the prior year, although the company managed these challenges effectively.

Amphenol maintained a strong liquidity position, with $1.31 billion in cash, cash equivalents, and short-term investments as of June 30, 2020. The company actively managed its working capital and used its Revolving Credit Facility and cash on hand to maintain financial flexibility.

The automotive and commercial aerospace markets experienced significant declines. However, the company saw strong performance or resilience in the information technology, data communications, mobile devices, and industrial markets, partly offset by contributions from acquisitions.

Amphenol expects the disruptions caused by COVID-19 to continue throughout the second half of 2020. The full impact remains uncertain and depends on future developments of the pandemic, government actions, and the global economic recovery. The company remains focused on mitigating these impacts and adapting to market conditions.