Reading time ( words)
Amphenol Corporation reported fourth quarter and full year 2021 results.
“We are pleased to have closed 2021 with fourth quarter sales and Adjusted Diluted EPS significantly exceeding the high end of our guidance,” said Amphenol President and Chief Executive Officer, R. Adam Norwitt. “Sales increased from prior year by a strong 25% in the quarter, with particularly robust growth in the IT data communications, industrial, mobile networks, commercial air, automotive and broadband markets, including contributions from the Company’s acquisition program. For the full year, sales increased 26% compared to 2020, driven by strong growth across virtually all end markets, including contributions from the Company’s acquisition program. Despite facing substantial inflationary pressures and supply chain disruptions, full year Adjusted Diluted EPS grew by an impressive 33%. We are very proud of the Company’s outstanding performance in this most challenging and dynamic year.”
“Throughout the year, we continued to deploy our financial strength in a variety of ways to increase shareholder value. During the fourth quarter, the Company purchased 2.1 million shares of its common stock for $171 million and paid dividends of $87 million, resulting in total capital returned to shareholders in 2021 of more than $1 billion.”
“We remain focused on expanding our 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. To that end, we were excited to have announced on December 1, 2021, the acquisition of Halo Technology Limited, as well as the closing of the sale of the MTS Test & Simulation business to Illinois Tool Works Inc. (NYSE: ITW). With the closing of the Halo acquisition, we successfully completed seven acquisitions in 2021. These new companies have broadened our high-technology product offering, expanded our position across most of our end markets and deepened our pool of talented, entrepreneurial managers around the world.”
Creation of Three New Divisions
Effective January 1, 2022, Amphenol aligned its business units into three newly formed Divisions: Harsh Environment Solutions (HES), Communications Solutions (CS), and Interconnect and Sensor Systems (ISS). This new alignment reinforces the Company’s entrepreneurial culture and the clear accountability of each of our business unit general managers, while enhancing the scalability of Amphenol’s business for the future. Beginning with the first quarter of 2022, the Company will report the financial results of these three new Divisions as separate reportable segments, replacing the Company’s previous two reportable segments. We will provide the results of these new reportable segments, as well as comparable historical financial data, with our first quarter 2022 results.
First Quarter 2022 Outlook
The current market environment remains highly uncertain, with continued supply chain and inflationary challenges as well as potential new disruptions from the recent resurgence of Covid-19. Assuming conditions do not meaningfully worsen and assuming constant exchange rates, for the first quarter of 2022, Amphenol expects sales to be in the range of $2.690 billion to $2.750 billion, representing 13% to 16% growth over the first quarter of 2021, and Adjusted Diluted EPS in the range of $0.59 to $0.61, representing 13% to 17% growth over the first quarter of 2021.
“Despite the ongoing challenges and uncertainties, we continue to face around the world, we are very pleased with the platform of strength that has been created by the Company’s superior performance in 2021,” Mr. Norwitt continued. “The revolution in electronics is accelerating, thereby creating exciting and dynamic long-term growth opportunities for Amphenol across each of our diversified end markets. Indeed, the last two pandemic-impacted years have revealed more than ever before the importance of innovative, new electronic applications. We believe these opportunities will enable a further, long-term increase in the demand for our expanding range of high-technology interconnect, sensor and antenna products. 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. In addition, we continue to take steps to further scale our unique, entrepreneurial organization to support the Company’s long-term growth potential, including the alignment of our business units into three new Divisions. 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 to protect the safety and health of our employees around the world throughout the ongoing pandemic, all while continuing to strongly support our customers and drive outstanding operating performance.”