Adam Norwitt
Chief Executive Officer at Amphenol
Well, thank you very much Craig, and I'd like to extend my warmest welcome to all of you here from beautiful Wallingford, Connecticut, where spring is certainly in the air. As you know, as it's typical, I'm going to highlight some of our achievements in the first quarter. I'll then discuss our trends and our progress across our diversified markets. Finally, I'll comment on the outlook for the second quarter, and of course we'll have time for questions.
Our results in the first quarter were stronger than expected, exceeding the high end of guidance in sales and adjusted diluted earnings per share. We're very pleased our sales grew from prior year by 9% in U.S. dollars and 10% in local currencies, reaching $3,256 million. On an organic basis, our sales increased by 6% with growth in IT datacom, commercial air, automotive, defense and mobile devices markets, somewhat offset by declines in the mobile networks, broadband and industrial markets. And I'll talk about each of those markets here in a few moments.
We're very pleased that the company booked $3,348 million in orders in the first quarter and that that represented a positive book to bill of 1.03:1. Our profitability was very strong in the quarter, and adjusted operating margins reached 21% even in the quarter, a robust 90 basis point increase from last year's levels. And from that profitability, we generated adjusted diluted EPS, which grew 16% from prior year to $0.80.
Finally, we generated strong operating and free cash flow of $599 million and $506 million, another clear demonstration of the high quality of the company's earnings. As Craig mentioned, we're very pleased that the Board of Directors has approved a new $2 billion three-year stock repurchase program, and this represents another important component of the company's balanced capital deployments.
I'm extremely proud of our global team of Amphenolians. The company's results this quarter once again reflect the discipline and agility of our entrepreneurial organization, who continue to perform very well in a most dynamic of environment. Now, as we announced on January 30th, just after our Q4 earnings, we're very pleased to have signed an agreement to acquire Carlyle Interconnected Technologies business for $2 billion in cash. CIT, as it is known, is a leading global supplier of harsh environment interconnect solutions, primarily to the commercial air, defense and industrial end markets, with approximately 6,000 employees worldwide. The company's wide range of products, including wire and cable, cable assemblies, contacts, connectors and sensors, are highly complementary to Amphenol's existing interconnect and sensor solutions. As previously announced, CIT is expected to have annual sales of approximately $900 million in 2024, with an EBITDA margin of approximately 20%.
We do continue to anticipate that the transaction will be completed by the end of this second quarter. Accordingly, and based on CIT's current operating performance, we do expect this acquisition to add roughly two pennies to earnings in the second half of 2024, excluding acquisition related costs. As we look forward to welcoming the outstanding CIT team to Amphenol, I remain confident that our acquisition program will continue to create great value for the company.
Our ability to identify and execute upon acquisitions, really of all sizes, and to successfully bring these new companies into Amphenol remains a core competitive advantage for the company. As our organization has evolved and scaled, so too has our ability to effectively manage a greater number of acquisitions of all sizes.
Now, turning to our progress across our served markets, I would just comment that we continue to be pleased that the company's end-market exposure remains highly diversified, balanced and broad. This diversification continues to create great value for Amphenol, enabling us to participate across all areas of the global electronics industry while not being disproportionately exposed to the risks associated with any given market or application. So, starting out with the defense market, this important market represented 11% of our sales in the quarter, and sales grew from prior year by a strong 13% in U.S. dollars and 11% organically. And this was really driven by broad-based growth across most segments within the defense market.
Sequentially, our sales were down by 2%, and this was modestly better than our expectations coming into the quarter. Looking into the second quarter, we expect sales to increase modestly from these first quarter levels, and we remain encouraged by the company's strengthened position in the defense market, where we continue to offer the industry's widest range of high technology interconnect products.
Amidst today's dynamic geopolitical environment, countries around the world are expanding their investments in both current and next generation defense technologies, thereby increasing the long-term demand potential for Amphenol. We're well positioned to accelerate our new product development while also increasing our capacity to support this demand long into the future.
The commercial aerospace market represented 4% of our sales in the quarter. Sales increased by a strong 20% both in U.S. dollars and organically, and that was really driven by broad-based strength across virtually all aircraft applications. Sequentially, our sales grew much better than expected, 11% from the fourth quarter. As we look into the second quarter, we do expect a modest reduction in sales versus these very strong first quarter levels. I'm just really proud of our team working in the commercial air market. With the ongoing growth in travel and thus demand for jetliners, our efforts to strengthen our breadth of high technology interconnect products while diversifying our market position into next generation aircraft are paying real dividends for the company. We continue to see great long-term opportunities for expansion of our technology offering to this important market, including with the CIT acquisition, and look forward to realizing the benefits of our growth initiatives for many years to come.
Industrial market represented 25% of our sales in the quarter, and our sales in this market did decline by 1% in U.S. dollars and 10% organically. During the quarter, we did see some growth in marine, public safety, rail mass transit and oil and gas applications, but that was more than offset by moderating performance, particularly in battery and electric heavy vehicles, instrumentation and factory automation.
On a sequential basis, we were pleased that sales were up 6% from the fourth quarter, a bit better than our expectations, but that growth was really driven by our acquisitions completed in the fourth quarter. Looking into the second quarter, we expect sales in the industrial market to remain at similar levels as here in the first quarter. And despite this near term pause in demand, I remain proud of our outstanding global team working in the industrial market, and I'm confident that our long-term strategy to expand our high technology interconnect antenna and sensor offering both organically and through complementary acquisitions has positioned us to capitalize on the many electronic revolutions that will no doubt continue to occur across the industrial market.
The automotive market represented 24% of our sales in the first quarter, and sales in the first quarter grew 18% in U.S. dollars and 17% organically. That was really driven by broad based strength across most automotive applications, including especially communications related applications, as well as electric and hybrid electric vehicle drivetrains. Sequentially, our sales declined by 3% from the fourth quarter, which was better than our expectations, and that reflected strong execution by our team working in the automotive market.
As we head into the second quarter, we do expect a modest sequential decline in sales, but I'm just so proud of our team working in the automotive market. Our continued and clear outperformance is yet another confirmation of the benefit of our team's focus on driving new design wins with customers who are implementing a wide array of new technologies into their vehicles. And while that includes electrified drivetrains, it also includes a multitude of other exciting applications, and we look forward to benefiting from that strong position for many years to come.
The mobile devices market represented 8% of our sales in the quarter. Our sales were flat from prior year in U.S. dollars, but grew 2% organically as growth in laptops and smartphones was offset by declines in tablets, wearables and other products. Sequentially, our sales declined by a better than expected 29% compared to the fourth quarter. As we head into the second quarter, we now expect a mid-single digit sales decline from these first quarter levels, as customers prepare for new model launches in the second half of 2024. While mobile devices will no doubt always remain one of our most volatile markets, our outstanding and agile team is poised as always to capture any opportunities for incremental sales that may arise in 2024 and beyond. Our leading array of antennas, interconnect products and mechanisms continue to enable a broad range of next generation mobile devices, which positions us well for the long term.
Mobile networks market represented 3% of our sales in the quarter, and sales did decline from prior year by 13% in U.S. dollars and 25% organically, as we continue to manage through a broad-based reduction in spending by network operators and wireless equipment manufacturers. Sequentially, though, we were pleased to see that our sales did grow by 5% from the fourth quarter as we had expected coming into Q1, and as we look into the second quarter, we now expect a high single digit increase in sales, which does reflect some increased demand that we are seeing from our mobile operator customers.
While no doubt the short-term investment environment in the mobile networks market has been challenging, I can just tell you that our team continues to work aggressively to realize the benefits of our efforts to expand our position in next generation 5G equipment and networks around the world. When customers once again drive renewed wireless investments, we look forward to benefiting from the increased potential that comes from our unique position with both equipment manufacturers and mobile service providers. We're poised to build on that position as wireless technology continues to accelerate long into the future.
The information technology and data communications market represented 21% of our sales in the quarter. Sales in the first quarter grew by a very strong 29% in U.S. dollars and 28% organically, and this was driven by accelerating demand for our products used in artificial intelligence data centers. On a sequential basis, sales increased by 1% from the fourth quarter, which was substantially better than our expectation for a mid-single digit decline. We continue to experience strong orders for AI related interconnect products, and accordingly, as we look into the second quarter, we expect sales to grow in the low double-digit range from these first quarter levels. I can tell you that we're more encouraged than ever by the company's position in the global IT datacom market. Our team continues to do a really outstanding job securing future business on next generation IT systems, particularly those enabling AI. Indeed, this revolution in AI that we're all living through right now has created a unique opportunity for Amphenol, given our leading high-speed and power interconnect products.
With machine learning driving a more intensive usage of these highest technology interconnect products, we're very well positioned for the future. And whether it's high speed, power or fiber optic interconnect, our products are critical components in these next-generation networks, and that just creates a continued long-term growth opportunity for the company.
The broadband market represented 4% of our sales in the quarter. Sales declined by 19% in U.S. dollars and organically from prior year, as broadband operators continued to reduce their procurement levels. On a sequential basis, sales were flat, which was slightly worse than our expectations coming into the quarter. And as we look into the second quarter, we anticipate sales to remain roughly at these first quarter levels. Regardless of the current demand dynamics in broadband, we do remain encouraged by the company's strengthened position. We look forward to continuing to support our service provider customers around the world, all of whom are working to increase their network coverage and bandwidth to support the proliferation of high-speed data applications to homes and businesses.
Now, turning to our outlook, and of course, assuming current market conditions as well as constant exchange rates, for the second quarter, we expect sales in the range of $3,240 million to $3,300 million, and adjusted diluted EPS in the range of $0.79 to $0.81. This would represent sales growth of 6% to 8%, and adjusted diluted EPS growth of 10% to 13% compared to the second quarter of last year. I just wanted to note that, as is our usual practice, this guidance does not include acquisitions which have not yet closed, including CIT.
I remain confident in the ability of our outstanding management team to adapt to the many opportunities and challenges in the current environment, and to continue to grow our market position, while driving sustainable and strong profitability over the long term. And finally, I would just like to take again this opportunity to thank the entire global team of Amphenolians around the world, nearly 100,000 of them worldwide, for their truly outstanding efforts here in the first quarter. And with that, operator, we'd be very happy to take any questions.
