Cable-equipment maker Amphenol Corp. increased earnings per share in the second quarter ended June 30 by more than 50% to $40.4 million (45 cents per share), buoyed in part by strong sales in its coaxial cable division.
Amphenol reported revenue of $387.2 million in the quarter, up 27% from $304.9 million in the same period last year, mainly due to strong sales in its wireless-communications division, also up 27%. Infrastructure and mobile handset component sales made up the bulk of the increase in the wireless segment of the business, which accounts for about 88% of total sales.
Net income rose 51.7% to $40.4 million from $19.5 million (22 cents per share) in the previous year. It was the tenth consecutive quarter of earnings growth for the company.
At its coaxial-cable division, primarily for broadband and cable networks, sales rose 27%. But Amphenol said operating income margins at the coaxial unit were hit by high materials costs. Coaxial cable makes up about 12% of total sales.
Still, the strong second-quarter results caused Amphenol to ramp up its full-year 2004 estimates. In a statement, Amphenol said that revenue should rise between 19% and 22% for the year, while earnings should increase between 33% and 40%. Previous estimates had revenue growing between 12% and 15% and earnings per share up 25% to 30%.
Amphenol generated about $47 million in cash during the quarter and chairman and CEO Martin Loeffler said in a conference call with analysts that uses for that cash include further expansion of operations and strategic acquisitions.
Amphenol opened five new facilities in the first half of the year, two in China and one each in Japan, Malaysia and Mexico; opened a new research and development facility in China and said that three additional facilities are expected to come online in the second half of 2004, two in China and one in Estonia. Loeffler added that strategic acquisitions are also on his mind.
“We haven’t made any acquisitions in the first half, but we certainly have several opportunities in front of us,” Loeffler said on the conference call. “We are confident that one or two could happen in the second half of this year.”
Loeffler wouldn’t be specific about any current targets, but said that potential acquisitions would not be concentrated on any particular market segment.
“Wherever its complementary to our product lines, wherever it is complementary to our geographic presence, that’s where we will look closer to make these acquisitions,” Loeffler said on the conference call. “The range that we are looking is somewhere between the $10 million and $40 million companies; it’s not the big companies.”
He said that the remaining cash would be used to pay down debt.
