Amphenol Corp. improved earnings and sales in the second quarter despite currency exchange pressures that lopped off several percentage points in the company’s financial performance as the U.S. dollar continued to strengthen against other international currencies.
The connector manufacturer reported net profit rose to $179 million, or 56 cents per share, in the quarter ended June 30, up approximately 2.3 percent, from $174.9 million, or 54 cents per share, in the second quarter of 2014. The company restated the comparable 2014 quarter results to adjust for its ongoing shares repurchase program. Revenue in the latest quarter climbed to $1.35 billion, from $1.31 billion, boosted both by organic growth and contributions from acquisitions, according to company executives.
“Our sales growth was driven by increases in the automotive, mobile device, industrial, information technology and data communications and military markets,” said R. Adam Norwitt, president and CEO of Amphenol, in a statement. “This growth was driven both organically and through the company’s successful acquisition program, and was partially offset by the negative impact of translation from the stronger dollar. EPS [earnings per share] excluding one-time items was $0.58 and grew 7 percent over the comparable 2014 quarter. The Company’s unique entrepreneurial culture continues to drive strong operating leverage in the business, resulting in a 20 basis point year-over-year increase in operating margins (excluding one-time items) to 19.7 percent in the second quarter 2015.”
Amphenol has been on an acquisition binge and recently offered to acquire rival FCI Asia Pte Ltd. for $1.3 billion. The company in June announced it had purchased Europe-based antenna supplier ProCom A/S and DoCharm Plastics Company Ltd., a Chinese vendor of interconnect assemblies for the automotive market, one of Amphenol’s main business segments. Norwitt said the FCI transaction is on track with a definitive agreement now in place and expects to close the deal by the end of 2015.
The acquisitions are creating growth opportunities for Amphenol in a global economy that company executives believe remain challenging due to “an increasing level of uncertainty” about demand conditions and fiscal problems in some regions. The purchase of competitors in Europe and Asia afford the company the opportunity to take advantage of strategic growth markets, including automotive and industrial applications.
“The electronics revolution continues to accelerate, with new applications and higher performance requirements driving increased demand for our high technology products across all of our end markets,” Norwitt said. “This creates a significant, long-term growth opportunity for Amphenol. Our ongoing actions to enhance our competitive advantages and build sustained financial strength, as well as our initiatives to broaden and diversify our high technology product offering both organically and through our successful acquisition program, have created a solid base for future performance.”
Concurrent with the announcement of its second quarter results, Amphenol also reported the appointment of Craig Lampo as chief financial officer, replacing Diana Reardon who is staying with the company as a financial advisor and will join the board of directors. Reardon had worked at Amphenol for about 27 years and before that with a consulting firm.
“Diana will be an outstanding addition to our Board,” said Martin Loeffler, chairman of Amphenol’s board of directors, in a statement. “She has intimate knowledge of the strategy, business and finances of the company gained during her more than 27 years with Amphenol. During her tenure as Chief Financial Officer, she has been an excellent steward of the company’s financial condition, helping to put the company in a superb position to continue to pursue sustained industry-leading growth and profitability and thereby create significant shareholder value.”