Amphenol Corporation (NYSE:APH) Q2 2019 Earnings Conference Call Transcript

Jul 24, 2019 • 01:00 pm ET


Amphenol Corporation (NYSE:APH) Q2 2019 Earnings Conference Call Transcript


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Hello and welcome to the Second Quarter Earnings Conference Call for Amphenol Corporation. Following today's presentation, there will be a formal question-and-answer session. [Operator Instructions]

I would now like to introduce today's conference host Mr. Craig Lampo. Sir, you may begin.

Craig A. Lampo

Thank you. Good afternoon, everyone. This is Craig Lampo, Amphenol's CFO. I'm here with, together with Adam Norwitt, our CEO. We would like to welcome you to our second quarter 2019 conference call.

Our second quarter 2019 results were released this morning. I will provide some financial commentary on the quarter and then Adam will give an overview of the business as well as current trends, and then we will take questions.

As a reminder, we may refer in this call to certain non-GAAP financial measures, and may make certain forward-looking statements. So please refer to the relevant disclosures in our press release for further information. The company closed the second quarter with sales of $2.015 billion and with GAAP and adjusted diluted EPS of $0.93 and $0.92 respectively .

Sales were up 2% in US dollars and up 4% in local currencies compared to the second quarter of 2018. From an organic standpoint, excluding both acquisitions and currency sales, sales in the second quarter decreased 1%. Sequentially sales were up 3% in US dollars and in local currency, and 1% organically.

Bringing down sales into our two segments. Our cable business, which comprised 4% of our sales was down 19% in US dollars and down 17% local currencies compared to the second quarter of last year. The Interconnect business, which comprise 96% of our sales was up 3% in US dollars and 5% local currencies compared to last year. Adam will comment further on trends by market in a few minutes.

Adjusted operating income was $408 million for the second quarter of '19 and adjusted operating margin was 20.3%, which is down 30 basis points compared to the second quarter of '18. Compared to the first quarter of '19, adjusted operating margins increased 20 basis points.

From a segment standpoint, in the cable segment margins were 9.7% which was down compared to 13.2% in the second quarter of '18 primarily driven by volume as well as to a lesser extent, product mix. In the interconnect segment, margins were a strong 22.2% in the second quarter of '19, which was down slightly compared to 22.4% in the second quarter of last year.

This strong performance is a direct result of the strength and commitment of the company's entrepreneurial management team, which continues to foster a high performance action-oriented culture and which each individual operating unit is able to appropriately adjust to market conditions and thereby maximize both growth and profitability in the increasingly uncertain market environment. Through the careful fostering of this culture and the deployment of our strategies to both existing and acquired companies, our management team has achieved industry-leading operating margins and remains fully committed to driving enhanced performance in the future.

Interest expense for the quarter was