Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Amit Daryanani - RBC Capital Markets.
Amit Daryanani - RBC Capital Markets
I think one of the questions that all of us may have is really given the strength you seen in September and really what we’re hearing broadly from the tech landscape in general, the December quarter guidance plus 2% of the mid point seems a little conservative, I think given what Amphenol usually sees mid high single growth in December. Could you just talk about, why the conservative guidance for Q4, if you saw some pull ins happen from Q4 to Q3?
Martin Loeffler
I wouldn’t say whether we’re saying pull ins. I mean certainly, we saw some reports today that reflected some component shortages in certain industries, which could imply that we have sold certain components that maybe used by our customers in later quarters. I think what we see here is really a guidance that we’re comfortable with that we’re confident in across all of our markets.
We have a diversity of our market segments, which is not necessarily reflective of every other tech company and we’re very confident that diversity has created good strength for us in the downturn. As we move into the fourth quarter all of our market segments we’re very focused on, expanding sequential growth, but at this time, we give a guidance which we think reflects what we hear from our customers.
Amit Daryanani - RBC Capital Markets
Then maybe just on the OpEx structure, I mean I think it was around $95 million this quarter. How should we think about the OpEx line going forward at least in the December quarter where I think you may have to put back some wage increases and year end expenses and then just Adam I guess longer term, you guys that really good job I think bringing the cost down and bringing it out of the model in the downturn. As sales start to ramp back, how should we think about OpEx growth and contribution margins going from here?
Adam Norwitt
I mean certainly our goal was always to gain operating leverage on our expenses and I think we’ve done a extremely good job across the organization of cutting expenses at every level whether they’re categorized as SG&A or factory expenses, whatever overhead our team has been very, very focused that throughout the year and has really achieved good results and that’s reflected in the profitability of 17.3% operating margins in the quarter is really something that we’re very proud of, going forward our mission will certainly be to control those expenses and not to grow them at the same rate that we grow revenue and thereby to achieve good conversion margins as we always have in the past.
- To read the full transcript on Seeking Alpha, click here »
