AMP earnings up for 3 months, Amphenol's climb to $4.5M

Electronic News, July 27, 1992

HARRISBURG, PA. -- AMP Inc. posted an 11 percent gain in second-quarter earnings to $72 million, or 68 cents a share, from $64.6 million, or 61 cents a share, last year. AMP's second-quarter sales rose 6 percent to $827 million, from $776 million.

While earnings met current estimates, analysts noted that late last month AMP had downsized earnings expectations by about a nickel a share. AMP last week attributed that lower-than-earlier expectation to the continued worldwide economic slump.

In addition, unlike the recent sales and gross margin boost many disk drive makers attributed to the current boom in personal computer sales, the connector maker cited the opposite effect. "The market in which connector pricing is the most competitive throughout the world is the PC market," the company said. Over-all gross margins rose to 14.3 percent from 13.5 percent last year.

U.S. second-quarter sales, representing 41 percent of the total, were flat compared with the immediately preceding fiscal period, although international rose slightly, the company noted. Moreover, apparently bucking an industry belt-tightening trend, the company noted that it increased personnel by 100 during the quarter to a total of 25,100.

For the six months ended June 30, earnings were $142 million, or $1.34 a share, up 5 percent from a profit of $135 million, or $1.27 a share, last year. Sales, meanwhile, rose at nearly that same pace to $1.64 billion, from $1.57 billion.

Concurrently, Wallingford, Conn.-based connector rival Amphenol posted a sharp rise in second-quarter earnings to $4.5 million, or 14 cents a share, from a net of $412,000, or 3 cents a share, last year. The firm said that primarily lower non-aerospace military demand diminished sales 11 percent to $115.7 million, from $130.4 million.

The company noted that its results were aided by its retirement of virtually all its existing debt last November, through proceeds raised from its $160 million initial public stock offering. The company said that on a pro-forma basis--as if the recapitalization occurred Jan. 1, 1991--second-quarter 1991 earnings would have been $6.5 million, or 20 cents a share.

For the first half earnings were $7.3 million, or 22 cents a share, compared with a $4.4 million loss the previous year. First-half sales, meantime, declined 9 percent to $232.3 million, from $256.2 million.

"The decline in military sales has been offset by improvements in both commercial and military aerospace programs as well as in the electronic data processing and telecommunications markets," said Martin H. Loeffler, president. He added "The company has continued to improve its operating margins through previously announced cost reduction programs."