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 HARRISBURG, Pa., July 28 /PRNewswire/ -- AMP Incorporated (NYSE: AMP) President and CEO William J. Hudson and Chairman James E. Marley today announced second quarter results and dividend declaration.
 Sales -- Up 7 percent to record $883 million from $827 million in year-earlier period.
 Earnings 72 cents per share -- Up 6 percent from 68 cents in year- earlier period.
 Order backlog -- Record $559 million, up $17 million during quarter.
 Employment -- Up 500 during quarter to 26,300.
 Sales -- Up 5 percent to new high of $1.72 billion from $1.65 billion in first half 1992.
 Earnings per Share -- Up 5 percent to $1.41 from $1.34 in year- earlier period.
 Capital Expenditures -- $136 million compared to $144 million in first half 1992. Total for year should match or exceed the $313 million in 1992.
 REGULAR QUARTERLY DIVIDEND OF 40 CENTS PER SHARE DECLARED -- Payable Sept. 1, 1993; Record date Aug. 9, 1993.
 Results are very closely in line with financial analysts' expectations. Sales set a new high of $883 million -- up 7 percent from $827 million in the year-earlier quarter and up 5 percent from $838 million in the preceding quarter. Both U.S. and international sales showed year-to-year and quarter-to-quarter growth in U.S. dollars -- with all regions showing growth over the year-earlier period in local currencies. The net effect of exchange rate changes was not significant because strengthening of the dollar against European currencies was nearly offset by weakening against the Japanese yen. The 72 cents per share earnings were up 6 percent from 68 cents in the year-earlier quarter and 4 percent from 69 cents in the prior quarter. Quarterly earnings have resumed their growth after an interruption in the fourth quarter of last year, with the overall operating margin improving from first to second quarter.
 Six months sales set a new high of $1.72 billion -- up 5 percent from $1.65 billion the first half of last year. U.S. sales (44 percent of the total) were up 11 percent and international sales were flat with the year-earlier period. International sales would have been $22 million higher if exchange rates had remained constant. European sales were up 3 percent in local currencies and down 5 percent in U.S. dollars. Asia/Pacific sales were flat in local currencies and up 6 percent in U.S. dollars. In the Western Hemisphere outside the U.S., sales were up 13 percent in U.S. dollars.
 U.S. sales growth continues to be very broad-based, with good gains in all AMP's major markets, even in the aerospace/military industry (less than 10 percent of the company's U.S. sales) where the market is declining because of government and airline cutbacks. European sales are up slightly year-to-year in local currency terms, despite recessionary conditions. This is primarily because of growth in newer markets such as networking and also because sales to the automotive industry (about one-third of AMP's total sales there) are down much less than the industry itself due to AMP's new products, market share gains, and the increasing connector content in new cars. The decline in AMP's German sales has been largely offset by good growth in France, Great Britain and Scandinavia. In Asia/Pacific strong growth continued in AMP's sales outside Japan, while sales in Japan were down modestly in local currencies because of the recession. The pricing situation is unchanged, the company said: generally firm in most of AMP's U.S. business because of stronger demand in the last two years, and continued modest price erosion on standard products in most markets in the rest of the world.
 Hudson and Marley said the outlook is generally favorable. "While U.S. economic growth and manufacturing activity is apparently slowing to a more modest pace, our planning for the second half and next year is based on the assumption of continued economic recovery and modest to good growth in most of the markets we serve. We continue to expect full year 1993 U.S. sales growth to be similar to last year's 11 percent. With this type of growth this year and next, we should be able to show some further improvement in U.S. margins. In Europe we think the second half will be the `bottoming out' or stabilization of economic conditions in most Western European countries now going through recessions.
 "We continue to expect that for the full year 1993, European sales will be flat to up slightly in local currencies compared to the prior year. Great Britain and Scandinavia are showing signs of economic recovery and we believe the other major countries will follow by mid- 1994. For full year 1993 we continue to expect Asia/Pacific sales to be up modestly in local currencies and up somewhat stronger in U.S. dollars over 1992 at current exchange rates.
 "The beginnings of recovery in our Japanese sales and continued strong growth in the rest of Asia/Pacific could nearly offset the usual summer seasonal softening in many of our markets, and result in third quarter sales down only slightly from the record second quarter level. If this does occur, earnings per share could improve slightly over both the second quarter's 72 cents and the 74 cents in the third quarter of 1992.
 "Looking beyond this year, we are as confident as ever that, given a reasonably favorable economic environment, we can steadily build shareholder value through increases in dividends, shareholders' equity and stock price. AMP has strong resources, serves good growth markets, and has a clearly defined strategy of expanding its role within those markets throughout the world. We are making good progress toward our goal of evolving from a multinational connector company to a globally integrated organization that can not only provide a widening range of components, but also entire interconnection systems and value-added assemblies -- and thus significantly outperform the connector industry during the decade ahead.
 "By the end of this year we will have added about a dozen international subsidiaries since the beginning of this decade, and we will continue to expand as new markets develop throughout the world. With this growing global activity, we strongly favor free trade and the passage of NAFTA (North American Free Trade Agreement) and GATT (General Agreement on Trade and Tariffs) as clearly favorable for the U.S. economy, the electrical/electronic markets AMP serves, and AMP."
 The spokesmen said expansion continues throughout the world. "In the U.S. we began construction of a large facility in North Carolina for manufacture of new automotive connectors. Upon resolution of certain regulatory matters, construction could begin later this year on another major engineering facility in the Harrisburg area. Our first plant in China will begin operation this fall in Shanghai. Second plants in both India and China are in the planning stage. Our third plant in Singapore is now starting operation, and a second plant in South Korea will soon be under construction. We recently established a marketing subsidiary in the Philippines.
 "Our first plant in Eastern Europe will begin operation early next year in Hungary. Expansion of facilities was completed in Holland and is in progress in Spain. We formed marketing subsidiaries in Poland and the Czech Republic, and will soon have our first subsidiary in the eastern Mediterranean region upon formation of a marketing company in Turkey.
 "In June we announced acquisition of a minority equity position in New Media Corporation, a small California-based private company that is a leader in the emerging, very rapidly growing PCMCIA (Personal Computer Memory Card International Association) card market. These "smart" electronics-packed, credit card-sized cards plug into personal computers and workstations to provide add-on memory, networking, fax, software, security, and other capabilities. This alliance significantly expands the capabilities of a strategic business unit we formed in January to enhance our role from providing not only the connectors for these cards, but also the cards themselves."
 This month an initial public offering of the stock of BroadBand Technologies, Inc., a leader in the network technology of bringing fiber optic communications to the home, was well received, they said. AMP acquired a minority position in BroadBand in late 1991 as part of its growing efforts to cover virtually all aspects of interconnection technology in the fast-growing networking markets.
 Harrisburg-based AMP Incorporated is the world's leading producer of electrical/electronic connection devices. It has 26,300 employees in 165 facilities in the U.S. and 34 other countries. AMP stock is listed on the New York, Pacific and other regional stock exchanges (Symbol -- "AMP").
 (Dollars in thousands except per share data)
 Three Months Ended June 30 1993 1992
 Net Sales $ 882,737 $ 826,980
 Cost of Sales 585,907 548,728
 Gross income 296,830 278,252
 Selling, General and
 Administrative Expenses 160,395 148,552
 Income from operations 136,435 129,700
 Interest Expense (5,202) (6,488)
 Other Income (Deductions), net (5,905) (4,512)
 Income before income taxes 125,328 118,700
 Income Taxes 49,590 46,650
 Net Income $ 75,738 $ 72,050
 Per Share - Net income 72 cents 68 cents
 Cash dividends 40 cents 38 cents
 Weighted average
 number of shares 104,891,889 105,717,559
 Six Months Ended June 30 1993 1992
 Net Sales $1,720,693 $1,645,556
 Cost of Sales 1,145,717 1,092,766
 Gross income 574,976 552,790
 Selling, General and
 Administrative Expenses 311,520 295,341
 Income from operations 263,456 257,449
 Interest Expense (10,584) (16,156)
 Other Income (Deductions), net (8,661) (7,576)
 Income before income taxes 244,211 233,717
 Income Taxes 95,950 91,510
 Net Income $ 148,261 $ 142,207
 Per Share - Net income $1.41 $1.34
 Cash dividends 80 cents 76 cents
 Weighted average
 number of shares 104,896,690 105,861,305
 (dollars in thousands)
 June 30 Dec. 31
 1993 1992
 Current Assets:
 Cash & cash equivalents $ 236,165 $ 370,753
 Marketable securities 106,853 107,224
 Receivables 696,900 561,038
 Finished goods & work in process 256,638 243,450
 Purchased & manufactured parts 153,447 145,670
 Raw materials 51,439 45,971
 Total inventories 461,524 435,091
 Other current assets 167,879 139,998
 Total current assets 1,669,321 1,614,104
 Property, Plant & Equipment 2,829,984 2,715,244
 Less-Accumulated depreciation 1,639,197 1,536,483
 Property, plant & equipment, net 1,190,787 1,178,761
 Investments and Other Assets 218,582 212,264
 TOTAL ASSETS $3,078,690 $3,005,129
 Current Liabilities:
 Short-term debt $ 189,577 $ 310,944
 Payables, trade & other 256,613 234,177
 Accrued liabilities 342,591 300,331
 Total current liabilities 788,781 845,452
 Long-Term Debt 119,019 42,870
 Other Liabilities & Deferred Credits 166,738 173,525
 Total liabilities 1,074,538 1,061,847
 Shareholders' Equity 2,004,152 1,943,282
 EQUITY $3,078,690 $3,005,129
 -0- 7/28/93
 /CONTACT: William Oakland of AMP, 717-780-6371/

CO: AMP Incorporated ST: Pennsylvania IN: CPR SU: ERN

LJ -- PH019 -- 7255 07/28/93 11:27 EDT
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Publication:PR Newswire
Date:Jul 28, 1993

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