Amphenol Reports Q3 2023 Results, Announces Dividend Increase

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Amphenol Corporation  reported third quarter 2023 results.

“We are pleased to have closed the third quarter of 2023 with sales and Adjusted Diluted EPS both exceeding the high end of our guidance,” said Amphenol President and Chief Executive Officer, R. Adam Norwitt. “Sales decreased from prior year by 3%, driven by moderations in the mobile networks, mobile devices, IT datacom, broadband and industrial markets, which were partially offset by growth in the commercial air, military and automotive markets as well as contributions from the Company’s acquisition program. Despite the reduction in our sales from prior year, our team executed strongly in the quarter, with Adjusted Operating Margin reaching 20.8%.”

“During the third quarter of 2023, Amphenol continued to deploy its financial strength in a variety of ways to increase shareholder value. This included the repurchase of 1.7 million shares of its common stock for $149 million as well as the payment of dividends of $125 million, resulting in total capital returned to shareholders of nearly $275 million.”

“We remain focused on expanding our growth opportunities through a deep commitment to developing enabling technologies for customers across our served markets, an ongoing strategy of market and geographic diversification as well as an active and successful acquisition program. To that end, we are excited to have closed on three acquisitions since our July earnings call: Connor Manufacturing Services, Q Microwave and XMA Corporation. Based in Illinois, Connor is a global manufacturer of power interconnect products including high voltage busbars for the automotive and industrial markets with annual sales of approximately $100 million. Based in California, Q Microwave is a designer and manufacturer of mission-critical radio frequency components utilized in military platforms with annual sales of approximately $20 million. Based in New Hampshire, XMA is also a provider of radio frequency components for the military and IT datacom markets with annual sales of approximately $15 million. Connor will be included in our Interconnect and Sensor Systems Segment, while Q Microwave and XMA will be included in our Harsh Environment Solutions Segment. All of these acquisitions further expand our offering of high-technology interconnect products across a variety of our markets, while adding talented management teams to the Amphenol family.”

“We are also pleased that on October 13, 2023, we entered into a definitive agreement to acquire PCTEL, Inc. (Nasdaq: PCTI). PCTEL is a leading global provider of antennas, as well as purpose-built Industrial IoT products and test and measurement solutions. The transaction is expected to close by early 2024, subject to approval from PCTEL’s shareholders and other customary closing conditions. We are excited by the opportunities PCTEL brings to further expand the breadth of our already strong antenna offering.”

Increase in Quarterly Dividend

On October 24, 2023, the Company’s Board of Directors approved a 5% increase in the Company’s quarterly dividend, from $0.21 per share to $0.22 per share. The new dividend amount will be paid on January 10, 2024 to shareholders of record as of December 19, 2023.

Fourth Quarter and Full Year 2023 Outlook

Assuming market conditions do not meaningfully worsen as well as constant exchange rates, for the fourth quarter of 2023, Amphenol expects sales to be in the range of $3.090 billion to $3.150 billion. This represents a 3% to 5% decline over the prior year quarter. Adjusted Diluted EPS is expected to be in the range of $0.75 to $0.77, representing a 1% to 4% reduction from the fourth quarter of 2022. For the full year 2023, Amphenol expects sales to be in the range of $12.317 billion to $12.377 billion, representing a 2% decline over the prior year, while Adjusted Diluted EPS is expected to be in the range of $2.94 to $2.96, representing a 1% to 2% decline over the prior year. This guidance does not include the impact of the PCTEL acquisition, which has not yet closed.

“Despite the ongoing challenges and uncertainties around the world, we are very pleased with the Company’s third quarter 2023 results,” Mr. Norwitt continued. “The revolution in electronics continues to accelerate, creating exciting long-term growth opportunities for Amphenol across each of our diversified end markets. Our ongoing drive to leverage our competitive advantages and create sustained financial strength, as well as our initiatives to expand our product offerings, both organically and through our acquisition program, have created an excellent base for the Company’s future performance. I am confident in the ability of our outstanding entrepreneurial management team to continue to dynamically adjust to changing market conditions, to capitalize on the wide array of growth opportunities that arise in all market cycles and to continue to generate sustainable long-term value for our shareholders and other stakeholders. Most importantly, I remain truly grateful to our team for their extraordinary efforts in navigating the many challenges around the world while continuing to strongly support our customers and drive outstanding operating performance.”