WALLINGFORD, CT – Amphenol reported second quarter sales of nearly $2 billion, down 1.4% year-over-year. Currency translation had the effect of decreasing sales by $22 million.
For the six months ended June 30, sales were $3.85 billion, a decrease of 3.1% compared to the same period in 2019. Currency translation had the effect of decreasing sales by $40 million for the first six months of 2020.
"The Covid-19 pandemic continued to negatively impact our business in the second quarter 2020, as certain customers experienced reduced demand, and several of our facilities faced production constraints related to government restrictions adopted to mitigate the spread of the virus,” said president and CEO R. Adam Norwitt. “Amid these very challenging conditions, our team drove results that exceeded our expectations, all while prioritizing the safety and health of our employees worldwide.
"We are pleased to have closed the second quarter 2020 with sales and adjusted diluted EPS reaching $1.987 billion and $0.81, respectively. Compared to the second quarter 2019, sales decreased by just 1%, primarily driven by the continued severe slowdown in the automotive and commercial air markets, largely offset by strong growth in the information technology and data communications, mobile devices and industrial markets.
"It is extremely rewarding that even in this most challenging environment, the company’s experienced management team continues to react quickly to ensure profitability, cash flow and liquidity remain strong. Despite facing significant cost pressures related to the Covid-19 pandemic, second quarter operating margins improved sequentially to 18%, and operating cash flow was $368 million, a clear confirmation of the quality of the company’s earnings. The company continues to deploy its financial strength in a variety of ways to increase shareholder value. To that end, while the company did not make any purchases under its stock buyback program in the second quarter, the company paid dividends of $74 million and paid down $1.3 billion of debt, resulting in $1.3 billion of cash and cash equivalents on hand at the end of the quarter.
"The company continues to expand its growth opportunities through a deep commitment to developing enabling technologies for customers in all markets, an ongoing strategy of market and geographic diversification and an active and successful acquisition program. As part of that program, we are excited to have acquired Onanon in the last week. Based in California, Onanon designs and manufactures a wide array of connectors and cable assemblies for customers in the industrial market, with a primary focus on medical applications. With annual sales of approximately $20 million, this acquisition strengthens the company’s global capabilities and enhances our product offerings, while adding an outstanding management team to the Amphenol family."
"As we look ahead, the continued and significant economic and public health uncertainties created by the Covid-19 pandemic make it difficult to accurately forecast our performance in the second half of 2020. Accordingly, we are once again not providing full-year sales and EPS guidance. However, considering the current demand environment and assuming no new material disruptions from the pandemic, as well as constant exchange rates, for the third quarter 2020, we expect sales to be in the range of $1.96 billion to $2 billion and adjusted diluted EPS in the range of $0.84 to $0.86.
"Despite the significant challenges posed by the current environment, we are encouraged by the platform of strength that has been created by the company’s consistent and superior performance. We remain confident in the ability of our outstanding entrepreneurial management team to dynamically adjust to changing market conditions, to capitalize on the wide array of growth opportunities that arise even in times of crisis and to continue to generate strong financial performance. Most importantly, I am truly grateful to our employees around the world for their incredible efforts to protect the safety and health of our entire team and support our local communities, all while ensuring our customers have a ready supply of our high-technology interconnect products, many of which are being used in support of the fight against the Covid-19 crisis."
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