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Amphenol warns of slowing demand, stock falls

October 19, 2011

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WALLINGFORD, Conn.—Amphenol Corp., which makes electrical cable and related equipment, on Wednesday said its customers are becoming more careful, and provided an outlook for the rest of the year that came in below analyst expectations.

The Wallingford, Conn.-based company's stock fell $2.20, or 5 percent, to $41.90. It's close to the 52-week low of $38.98 hit two weeks ago.

The outlook accompanied Amphenol's report of third-quarter results. In the quarter that ended Sept. 30, it earned net income of $134.6 million, or 79 cents per share. That compares with $137.3 million, or 78 cents per share, in the same period last year.

The earnings per share rose even as net income fell because Amphenol has bought back shares since last year, reducing the number of shares outstanding by 3.6 percent year over year.

The latest results included the effect of an $8 million, or 5 cents per share, one-time charge for flood damage at the Amphenol's Sidney, N.Y., factory, plus a tax benefit of 3 cents per share. Excluding these items, Amphenol said it earned 81 cents per share.

Analysts polled by FactSet were on average expecting earnings of 78 cents per share, excluding items.

Revenue rose 8.9 percent to $1.03 billion from $948.5 million in the year-ago quarter. It slightly beat analyst expectations for $1 billion.

Amphenol's components are used in diverse products, from phones to medical equipment to missile systems. The company said phones and autos were the strongest markets in the third quarter. But it's seeing its customers become more cautious, and doesn't expect the added demand for phone components to carry over into the new quarter.

Amphenol said it expects to earn 69 cents to 71 cents per share in the current quarter on $920 million to $940 million in revenue. Analysts were expecting 79 cents per share on $1.0 billion in sales.

For 2011, the company reduced its full-year earnings per share guidance to a range of $3.01 to $3.03 from between $3.07 and $3.11. Sales guidance was reduced to a range of $3.91 billion to $3.93 billion from prior guidance between $3.98 billion and $4 billion.

Analysts surveyed by FactSet expect, on average, an annual profit of $3.08 per share on revenue of $3.97 billion.