🔒Amphenol posts record results, discloses up to $300M potential China tax exposure

Wallingford-based Amphenol Corp. on Wednesday reported record fourth-quarter and full-year financial results while also disclosing a potential tax exposure of up to $300 million tied to subsidiaries in China. The electronics and fiber-optic connector manufacturer said fourth-quarter sales rose 49% from a year earlier to $6.44 billion. Net income attributable to Amphenol increased to $1.2 billion, or 93 cents per diluted share, up from $746.2 million, or 59 cents per diluted share, in the year-ago period. For the full year, sales climbed 52% to $23.1 billion. Net income attributable to the company rose to $4.27 billion, or $3.34 per diluted share, from $2.42 billion, or $1.92 per diluted share, in 2024. According to The Associated Press, the quarterly results topped Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 93 cents per share, the AP said. Amphenol designs and manufactures electrical, electronic and fiber-optic connectors, cable and interconnect systems, antennas and sensors, and operates manufacturing and assembly facilities in about 40 countries. President and CEO R. Adam Norwitt said the company’s revenue growth was driven by demand across most of its end markets, particularly the IT datacom sector, along with contributions from acquisitions. Its latest deal closed in January with the purchase of CommScope’s Connectivity and Cable Solutions business. That business is expected to generate about $4.1 billion in sales in 2026 and add approximately 15 cents to adjusted earnings per share. Amphenol issued an outlook for the current quarter, saying it expects first-quarter sales to range from $6.9 billion to $7 billion, representing growth of about 43% to 45% from a year earlier.

China tax issue

Meantime, Amphenol said certain subsidiaries in China received notices from local tax authorities challenging tax positions taken over a period of up to eight years. The company said it recorded a $100 million charge in the fourth quarter, which it said represents its current best estimate of the cost to resolve the matter. Amphenol said the potential range of exposure could reach approximately $300 million. The company said it believes its tax positions are appropriate and is in discussions with the relevant authorities, but it cannot estimate the timing of a resolution. The charge was recorded as a discrete tax item and affected reported earnings for the quarter and year.