Dj Auto-Tech Supplier Investors Will Ask Questions Later - Market Talk

Auto-technology supplier investors are taking a 'sell now, ask questions later' approach to new tariffs against Mexico, Canada and China, Baird analysts Luke Junk and Benjamin Schmid say in a research note covering companies including Amphenol and Mobileye Global. The market is wondering whether the tariffs are merely a negotiating tactic or could prove to be more durable in the near-term, the analysts say. The tariffs will need to be passed on to consumers to avoid broad supply chain disruptions, they say, drawing a parallel to similar dustups around the chip shortages and inflation of 2021 and 2022. (dean.seal@wsj.com)

Mobileye Global Inc. MBLY reported fourth-quarter 2024 adjusted earnings per share of 13 cents, which beat the Zacks Consensus Estimate of 12 cents. However, earnings were lower than 28 cents per share recorded in the year-ago quarter.

Total revenues amounted to $490 million, beating the Zacks Consensus Estimate of $480 million. However, the metric was down 23% year over year. This was primarily due to a 20% reduction in EyeQ SoC volumes. The decrease stemmed from the previously disclosed significant inventory build-up by Tier 1 customers.

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In the fourth quarter, Mobileye’s gross margin decreased 5 percentage points year over year. The decline was mainly due to costs related to amortization of intangible assets on a lower revenue base. The adjusted gross margin remained flat year over year.

Adjusted operating margin declined 18 percentage points year over year to 21% due to higher operating expenses on a lower revenue base.

MBLY had cash and cash equivalents of $1.43 billion as of Dec. 28, 2024, compared with $1.21 million as of Dec. 30, 2023. Operating cash flow for 2024 (ended Dec. 28, 2024) was $400 million. Capex was $81 million during the same time frame.

Mobileye has provided its sales and profit guidance for full-year 2025. MBLY estimates revenues in the range of $1.69-$1.81 billion compared with $1.65 billion recorded in 2024. It expects operating loss in the band of $489-$574 million compared with the operating loss of $3.2 billion incurred in 2024. Adjusted operating income is estimated in the band of $175-$260 million compared with $193 million in 2024.

Zacks Rank & Key Picks

MBLY carries a Zacks Rank #4 (Sell) at present.

Some better-ranked stocks in the auto space are Geely Automobile Holdings Limited GELYY, Yamaha Motor Co., Ltd. YMHAY and Allison Transmission Holdings, Inc. ALSN. While GELYY sports a Zacks Rank #1 (Strong Buy), YMHAY and ALSN carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GELYY’s fiscal 2025 sales and earnings suggests year-over-year growth of 66.62% and 149.31%, respectively. EPS estimates for fiscal 2025 and 2026 have improved by 15 cents and 38 cents, respectively, in the past 30 days.

The Zacks Consensus Estimate for YMHAY’s 2025 sales and earnings suggests year-over-year growth of 8.69%and 19.07%, respectively. EPS estimates for 2025 have improved by a penny in the past 60 days.

The Zacks Consensus Estimate for ALSN’s 2025 sales and earnings suggests year-over-year growth of 6.67% and 11.40%, respectively. EPS estimates for 2025 have improved 3 cents in the past 30 days.

Zacks Investment Research

Amphenol said Monday it has completed acquisition of CommScope's outdoor wireless networks and distributed antenna systems businesses.

Amphenol said it expects the two businesses to generate full-year 2025 sales of approximately $1.3 billion and add $0.06 to its 2025 earnings per share, excluding acquisition-related expenses.

The acquisition adds about 4,000 new employees, the company said.

Amphenol also said it closed its acquisition of Lifesync, which generates annual sales of about $100 million.

CommScope said in a separate statement that proceeds from the sale will be used to pay down debt.

Amphenol Corp. (APH) filed a Form 8K - Regulation FD Disclosure - with the U.S Securities and Exchange Commission on February 03, 2025.

On February 3, 2025, Amphenol Corporation, a Delaware corporation (the "Company"), issued a press release announcing the closing of the transaction contemplated by that certain Purchase Agreement, dated as of July 18, 2024, by and between the Company and CommScope Holding Company, Inc., a Delaware corporation. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished herewith and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

The full text of this SEC filing can be retrieved at: https://www.sec.gov/Archives/edgar/data/820313/000110465925008414/tm255016d1_8k.htm

Any exhibits and associated documents for this SEC filing can be retrieved at: https://www.sec.gov/Archives/edgar/data/820313/000110465925008414/0001104659-25-008414-index.htm

Public companies must file a Form 8-K, or current report, with the SEC generally within four days of any event that could materially affect a company's financial position or the value of its shares.