R. Adam Norwitt
President and Chief Executive Officer at Amphenol
Well Craig, thank you very much and I hope that all of you in the call here today are enjoying this summer so far and most importantly your family your friends and your colleagues are all still managing to stay safe and healthy.
As Craig mentioned, I'm going to highlight some of our achievements in the second quarter. And then I'm going to discuss our trends and progress across our served markets. I'll then make a few comments on our outlook for the third quarter. And then finally, we'll, of course, have time for questions.
As Craig just went over, our results in the second quarter were much better than expected. We exceeded the high end of our guidance in sales and adjusted diluted earnings per share. Sales grew a very strong 18% in U.S. dollars and 21% in local currencies, reaching a new record of $3.137 billion. On an organic basis, our sales increased by 18% supported by robust growth across nearly all of our end markets as well as contributions from our acquisition program, which was partially offset by the strengthening U.S. dollar.
Company booked record orders of nearly $3.450 billion and that represented a continued positive book-to-bill of 1.1:1. We are especially pleased to deliver strong profitability in the quarter, with operating margins reaching 20.7% and that's a 70 basis point increase from both prior year and prior quarter. And we achieve these operating results despite facing a wide range of operational inflationary and supply chain challenges as well as the COVID shutdowns in China, that Craig mentioned.
Adjusted diluted EPS grew a strong 23% from prior year to a new record of $0.75, another excellent reflection of our continued strong execution. And then finally, we're very pleased that the company generated record operating and free cash flow in the quarter of $543 million and $452 million respectively.
I just want to say how proud I am of our team around the world. Our results this quarter once again reflect the strength of Amphenol's entrepreneurial organization, who has continued to perform very well amidst a highly dynamic and challenging environment.
We're very pleased to have announced in the quarter that we closed on the acquisition of NPI Solutions based in Morgan Hill, California and with annual sales of approximately $65 million, NPI is a manufacturer of cable assemblies and complex interconnect assemblies for the industrial market with a particular focus on customers in the semiconductor equipment and test and measurement markets. The addition of NPI expands our already broad position in value-add interconnect for these important and high potential markets.
As we welcome this outstanding new team to Amphenol, I remain confident that our acquisition program will continue to create great value for the company. In fact, our ability to identify and execute upon acquisitions and successfully bring those companies into Amphenol remains a core competitive advantage for the company.
Now turning to our progress across our served markets. I would just note once again how pleased we are that our end market exposure remains highly diversified, balanced and broad. No doubt about it, during these very dynamic times, that market diversification continues to create great value for the company.
The military market represented 9% of our sales in the quarter. Sales declined by 2% from prior year but were flat organically with moderations in our sales into naval and military vehicle applications offset by growth in space, avionics and UAVs. Sequentially, our sales increased by 3%, which was in line with our expectations coming into the quarter. As we look into the third quarter, we expect sales to increase modestly from these second quarter levels, and we continue to be very pleased with the strength of the company's broad position across the military market.
As militaries around the world continue to adopt a wide array of next-generation defense technologies, our industry-leading breadth of high-technology interconnect and sensor products positions the company strongly across all major defense programs. This gives us great confidence for our long-term performance.
The commercial aerospace market represented 3% of our sales in the quarter, and our sales increased by a very strong 32% from prior year and 36% organically as we benefited from the continued recovery in global aircraft production. Sequentially, our sales grew 11% from the first quarter, which was actually much better than the expectations that we had coming into the quarter.
Looking into the third quarter, while we do expect a seasonal low double-digit sequential decline in sales, we anticipate continued and substantial growth from prior year. We're very encouraged to have driven another quarter of strength in the commercial air market, which is quite a welcome development after 2 extremely challenging years in the air travel industry as personal and business travel continues to recover, we look forward to benefiting from the company's strong interconnect and sensor technology position across a wide array of aircraft platforms and next-generation systems integrated into those planes.
I'm particularly proud of our team working in commercial air, who really have persevered throughout the downturn, and we are now once again realizing the fruits of their long-term labors.
Industrial market represented 26% of our sales in the second quarter. Sales in the quarter grew 13% in U.S. dollars and 15% organically, and this was driven by broad-based strength across most of our industrial end markets, including especially the battery and electric heavy vehicle applications, oil and gas, medical and rail mass transit. On a sequential basis, our sales increased by a better-than-expected 8% from the first quarter.
Looking into the third quarter, we expect sales to roughly remain at these very robust second quarter levels.
I have to say that our results this quarter confirm once again that our outstanding global team working in the industrial market continues to find new opportunities for growth across the many segments of this exciting market. I remain 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 well to capitalize on the many revolutions happening across the industrial electronics market.
To that end, the addition of NPI Solutions further strengthens our position in the important semiconductor and test and measurement equipment interconnect markets. We look forward to realizing the benefits of this long-term strategy for many years to come.
The automotive market represented 20% of our sales in the quarter. Sales in the second quarter grew 23% in U.S. dollars and 29% organically, and this was driven by broad-based strength across most automotive applications with particular strength once again in sales into electric and hybrid electric vehicle applications.
Sequentially, our sales increased by 6%, which was much better than our expectations coming into the quarter when we had anticipated a modest sequential decline. For the third quarter, we now expect a moderate sequential decline in sales as customers continue to manage through a wide array of supply chain challenges in the global automotive market. I remain extremely proud of our team working in the important and dynamic automotive market. They continue to manage through a difficult supply chain environment all while remaining focused on driving new design wins with customers who are implementing a wide array of new technologies into their vehicles. Our continued outperformance is a direct result of their excellent efforts.
The mobile devices market represented 9% of our sales in the quarter. Our sales increased by 7% in the second quarter as strength in smartphones and laptops were somewhat offset by moderation of sales of products incorporated into tablets. Sequentially, our sales declined by a better-than-expected 6% versus the first quarter.
Looking now into the third quarter, we anticipate sales to increase by more than 20% compared to the second quarter levels on typical seasonal strength. I remain very proud of our team working in the mobile devices market. In particular, amidst the COVID-related disruptions in China that occurred early in the quarter, our outstanding and agile team once again delivered strong results. Most importantly, they continue to design our leading array of antennas, interconnect products and mechanisms into a wide range of next-generation mobile devices. And they remain, as always, poised to capture any opportunities for incremental sales that may arise this year and beyond.
The mobile networks market represented 5% of our sales in the quarter, and sales grew from prior year by 9% in U.S. dollars and 6% organically as strength from products sold to network operators, together with the benefit of acquisitions, more than offset a moderation of our sales to wireless equipment manufacturers.
Sequentially, our sales in the second quarter grew by a slight 1%, but that was better than our expectations coming into the quarter. Looking to the third quarter, we now expect to grow moderately from these second quarter levels. We're encouraged by the company's continued strength in our sales into the mobile networks market. As operators ramp up their investments in next-generation systems, our team remains focused on realizing the benefits of our long-term efforts to expand our position in next-generation 5G equipment and networks around the world.
The information technology and data communications market represented 23% of our sales in the quarter. Sales were stronger than expected, rising by a very robust 31% in U.S. dollars and 26% organically from prior year. Our team really just executed well in fulfilling broad-based strength across server and networking applications, including with web service providers. Sequentially, our sales increased by 11% in the second quarter, which was better than our expectations.
Looking to the third quarter, we expect sales to moderate from these very strong second quarter levels. Nevertheless, we remain encouraged by the company's outstanding position in the global IT datacom market.
Both our OEM and web service provider customers continue to drive their equipment and networks to ever higher levels of performance really in order to manage the dramatic increases in demand for bandwidth and processor power. We look forward to realizing the benefits of that leading position in this important market for many years to come.
Finally, the broadband market represented 5% of our sales in the quarter. Sales grew by a very strong 57% in U.S. dollars and 28% organically as broadband spending levels increased and as we benefited from our recent acquisitions. Our growth in broadband was particularly strong in North America.
On a sequential basis, sales increased by a much better-than-expected 14% from the first quarter. As we head into the third quarter, we do expect sales to the broadband market to decline moderately from these levels. But we look forward to continuing to support our broadband service provider customers around the world with our expanded range of high-technology products.
As our customers increase the bandwidth and capacity of their networks to support the expansion of high-speed data applications to even more homes and businesses. These products have become even more critical.
Now turning to the company's outlook. There is no doubt that the current market environment remains highly uncertain with ongoing supply chain and inflationary challenges as well as some continued disruptions from the COVID 19 pandemic. Assuming those conditions do not meaningfully worsen and also assuming constant exchange rates. For the third quarter, we expect sales in the range of $3.040 billion to $3.100 billion and adjusted diluted EPS in the range of $0.73 to $0.75. This would represent strong sales growth of 8% to 10% and adjusted diluted EPS growth of 12% to 15% compared to the third quarter of 2021.
I just want to say that I remain confident in the ability of our outstanding Amphenol management team to adapt to the many opportunities and challenges in the marketplace and to continue to grow our market position while expanding the company's profitability.
In addition, our entire organization remains fully committed to delivering long-term sustainable value all while prioritizing the continued well-being of each of our employees around the world. And finally, and most importantly, I would like to take this opportunity to thank that entire Amphenol team for their truly outstanding efforts here in the second quarter.
And with that, operator, we'd be very happy to take any questions that there may be.