Analysts were expecting Amphenol Corporation (APH) [Chart - News - Analysis] to report earnings of $0.43 for last quarter, but APH beat expectations with actual earnings of $0.47---4 cents above the consensus estimate. APH also issued earnings guidance for next quarter that is above current analyst expectations.

If you compare last quarter's earnings to the $0.63 the company made per share during the same quarter a year ago, you can see that APH’s earnings are down this year.

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Also, if you compare APH's 16.50% projected earnings-per-share (EPS) growth rate for the next five years with the projected EPS growth rate of 17.69% for the Diversified Electronics industry as a whole during that same time frame, you can see that analysts expect APH to underperform the industry in the future---which is a bad sign for the stock.

Drilling down a little deeper into the Diversified Electronics industry, you can see how analysts believe APH will stack up against some of the other stocks in the industry, like Tyco International Ltd. (TYC) [Chart - News - Analysis] and Kyocera Corp. (KYO) [Chart - News - Analysis], in the future. Analysts believe TYC's earnings are going to grow at a rate of 14.95% while KYO's earnings are going to grow at a rate of 20.32%.

Earnings season can be a volatile time in the stock market. Check out these videos and articles to be better prepared to take advantage of the large price moves that tend to accompany earnings announcements.

- Earnings Season is Here - Find Out How to Trade It

- Using Options to Trade Earnings

- Understanding Stock Analyst Research and Recommendations

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Janney Mntgmy Scott gave the Diversified Electronics industry some good news as it announced it has initiated coverage on one of its stocks.

Suntech Power Holdings Co. Ltd. (STP) [Chart - News - Analysis] was given a rating of Neutral on 10/2/2009---a positive sign for the stock that investors typically welcome. FYI, Janney Mntgmy Scott uses the following rating scale when analyzing stocks: Buy, Neutral, Sell.

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Suntech Power Holdings Co. Ltd. has an average analyst recommendation score of 3.3 and competes for investment dollars with Tyco International Ltd. (TYC) [Chart - News - Analysis] and Kyocera Corp. (KYO) [Chart - News - Analysis]---two other stocks in the Diversified Electronics industry that have average analyst recommendation scores of 2.1 and 1.0 respectively.

Analyst recommendations are averaged and scored using the following rating scale:

- 1.0 = Strong Buy

- 2.0 = Buy

- 3.0 = Hold

- 4.0 = Sell

- 5.0 = Strong Sell

Why are Upgrades and Initiations Good and Downgrades Bad?

One event that is almost certain to get a reaction from Wall Street is an analyst upgrade or downgrade. Everyone is looking for an edge in the stock market, and quite often, traders turn to stock analysts to get that edge.

Upgrades and coverage initiations are typically good for stocks because they show that analysts either believe that the stock is going to perform better in the future or that the stock is worth covering and providing analysis on.

Downgrades are typically bad for stocks because they show that analysts believe that the stock is going to perform worse in the future.

What is a Stock Analyst?

Check out the Understanding Stock Analyst Research and Recommendations video and article for more info.

A stock analysts is a person---typically employed by a large bank, investment firm or analysis company---who devotes his/her life to learning and making predictions about a company and its future performance.

Stock analysts sift through company reports and filings, talk to company management, probe customers and competitors and basically do whatever they can to find out if a company is healthy and growing or sick and shrinking. Because this is incredibly demanding work, stock analysts typically only monitor one or two companies at a time.

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