Amphenol Corporation (APH) Q3 2022 Earnings Call Transcript

For the period ending Sep 30, 2022

October 26, 2022 1:00 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Hello, and welcome to the Third Quarter Earnings Conference Call for Amphenol Corporation. Following the presentation, there will be a question-and-answer session. Until that, you remain in a listen-only mode. At the request of the company, today's conference is being recorded today.

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

Craig Lampo - CFO

Good afternoon, everyone. This is Craig Lampo, Amphenol's CFO, and I'm here together with Adam Norwitt, our CEO. We would like to welcome you to our third quarter 2022 conference call. Our third quarter 2020 results were released this morning. I will provide some financial commentary, and then Adam will give an overview of the business and current trends, then we will take questions.

As a reminder, during the call, we may refer to certain non-GAAP financial measures and make certain forward-looking statements. So please refer to the relevant disclosures in our press release for further information. In addition, all prior year comparative data discussed during this year -- during this call is on a continuing operations basis.

The company closed the third quarter with record sales of $3.29 billion and record GAAP and adjusted diluted EPS of $0.80. Third quarter sales were up 17% in U.S. dollars, 21% in local currencies and 18% organically compared to the third quarter of 2021. Sequentially, sales were up by 5% in U.S. dollars, 7% in local currencies and 6% organically. Adam will comment further on trends by market in a few minutes.

Orders in the quarter were $3.151 billion, resulting in a book-to-bill ratio of 0.96:1. Year-to-date, our book-to-bill remains strong at 1.07 to 1, and the company continues to have a robust order backlog. GAAP and adjusted operating income were $681 million and $693 million, respectively, in the third quarter of 2022. GAAP and adjusted operating margin were 20.7% and 21%, respectively, in the third quarter.

On a GAAP basis, operating margin increased by 40 basis points compared to the third quarter of '21 and was flat sequentially. GAAP operating margin for the third quarter included $12 million of acquisition-related costs. On an adjusted basis, operating margin increased by 70 basis points compared to the third quarter of '21 and 30 basis points sequentially. The year-over-year increase in adjusted operating margin was driven by strong operating leverage on the significantly higher sales volumes as well as the benefit of ongoing pricing actions. On a sequential basis, the increase in operating margin reflected strong operating leverage on the higher sales volumes.