TE Connectivity announces third quarter results for fiscal year 2024
TE Connectivity (NYSE: TEL) reported strong fiscal Q3 2024 results, with adjusted EPS of $1.91, up 8% year-over-year and exceeding guidance. Despite a 1% decline in reported net sales to $4.0 billion, organic sales grew 2%. The company achieved record operating margins of 19.3%, up 200 basis points year-over-year. Orders increased 4% to $4.1 billion, driven by momentum in artificial intelligence programs. TE Connectivity generated record year-to-date cash flow, with cash from operations up 22% to $2.4 billion and free cash flow up 36% to $2.0 billion. For Q4 FY24, the company expects net sales of $4.0 billion and adjusted EPS of $1.94, up 9% year-over-year.
TE Connectivity (NYSE: TEL) ha riportato risultati solidi per il terzo trimestre fiscale del 2024, con un utile per azione rettificato di $1,91, in aumento dell'8% rispetto all'anno precedente e oltre le aspettative. Nonostante un calo dell'1% delle vendite nette riportate a $4,0 miliardi, le vendite organiche sono cresciute del 2%. L'azienda ha raggiunto margini operativi record del 19,3%, in aumento di 200 punti base rispetto all'anno scorso. Gli ordini sono aumentati del 4% a $4,1 miliardi, spinti dall'inerzia nei programmi di intelligenza artificiale. TE Connectivity ha generato un flusso di cassa record da inizio anno, con il flusso di cassa operativo in aumento del 22% a $2,4 miliardi e il flusso di cassa libero in aumento del 36% a $2,0 miliardi. Per il quarto trimestre dell'anno fiscale 2024, l'azienda prevede vendite nette di $4,0 miliardi e un utile per azione rettificato di $1,94, in aumento del 9% rispetto all'anno precedente.
TE Connectivity (NYSE: TEL) reportó resultados sólidos para el tercer trimestre fiscal de 2024, con ganancias por acción ajustadas de $1.91, un aumento del 8% interanual y superando las expectativas. A pesar de una disminución del 1% en las ventas netas reportadas a $4.0 mil millones, las ventas orgánicas crecieron un 2%. La compañía logró márgenes operativos récord del 19.3%, un aumento de 200 puntos básicos en comparación con el año anterior. Los pedidos aumentaron un 4% hasta $4.1 mil millones, impulsados por el impulso en programas de inteligencia artificial. TE Connectivity generó un flujo de efectivo acumulado récord hasta la fecha, con flujos de efectivo de las operaciones en aumento del 22% a $2.4 mil millones y flujos de efectivo libre en aumento del 36% a $2.0 mil millones. Para el cuarto trimestre del año fiscal 2024, la compañía espera ventas netas de $4.0 mil millones y ganancias por acción ajustadas de $1.94, lo que representa un aumento del 9% interanual.
TE Connectivity (NYSE: TEL)는 2024 회계년 3분기 강력한 실적을 발표했으며, 조정된 주당 순이익이 $1.91로 전년 대비 8% 증가하고 가이던스를 초과했습니다. 보고된 순매출이 $4.0억으로 1% 감소했지만, 유기적 매출은 2% 증가했습니다. 회사는 19.3%의 기록적인 운영 마진을 달성했으며, 이는 전년 대비 200 베이시스 포인트 상승한 수치입니다. 인공지능 프로그램에 대한 증가세에 힘입어 주문은 4% 증가하여 $4.1억에 이르렀습니다. TE Connectivity는 올해 들어 기록적인 현금 흐름을 창출했으며, 운영에서의 현금이 22% 증가하여 $2.4억에 도달하고, 자유 현금 흐름은 36% 증가하여 $2.0억에 이르렀습니다. 2024 회계년 4분기에는 회사가 $4.0억의 순매출과 $1.94의 조정된 주당 순이익을 예상하고 있으며, 이는 전년 대비 9% 증가한 수치입니다.
TE Connectivity (NYSE: TEL) a annoncé de solides résultats pour le troisième trimestre de l'exercice 2024, avec un bénéfice par action ajusté de $1,91, en hausse de 8% par rapport à l'année précédente et dépassant les prévisions. Malgré une baisse de 1% des ventes nettes déclarées à $4,0 milliards, les ventes organiques ont progressé de 2%. L'entreprise a atteint des marges opérationnelles record de 19,3%, en hausse de 200 points de base par rapport à l'année précédente. Les commandes ont augmenté de 4% pour atteindre $4,1 milliards, alimentées par l'élan des programmes d'intelligence artificielle. TE Connectivity a généré un flux de trésorerie record depuis le début de l'année, avec un flux de trésorerie provenant des opérations en hausse de 22% à $2,4 milliards et un flux de trésorerie libre en hausse de 36% à $2,0 milliards. Pour le quatrième trimestre de l'exercice 2024, l'entreprise prévoit des ventes nettes de $4,0 milliards et un bénéfice par action ajusté de $1,94, en hausse de 9% par rapport à l'année précédente.
TE Connectivity (NYSE: TEL) hat starke Ergebnisse für das dritte Quartal des Geschäftsjahres 2024 gemeldet, mit bereinigtem Gewinn je Aktie von $1,91, was einem Anstieg von 8% im Vergleich zum Vorjahr entspricht und die Prognosen übertrifft. Trotz eines Rückgangs der berichteten Nettoumsätze um 1% auf $4,0 Milliarden stiegen die organischen Umsätze um 2%. Das Unternehmen erzielte Rekordbetriebsgewinne von 19,3%, was einem Anstieg von 200 Basispunkten im Vergleich zum Vorjahr entspricht. Die Bestellungen stiegen um 4% auf $4,1 Milliarden, getrieben durch den Schwung in Programmen der künstlichen Intelligenz. TE Connectivity erzielte einen rekordverdächtigen Cashflow seit Jahresbeginn, wobei der Cashflow aus dem operativen Geschäft um 22% auf $2,4 Milliarden stieg und der freie Cashflow um 36% auf $2,0 Milliarden anstieg. Für das vierte Quartal des Geschäftsjahres 2024 erwartet das Unternehmen Nettoumsätze von $4,0 Milliarden und einen bereinigten Gewinn je Aktie von $1,94, was einem Anstieg von 9% im Vergleich zum Vorjahr entspricht.
- Adjusted EPS of $1.91, up 8% year-over-year and exceeding guidance
- Record operating margins of 19.3%, up 200 basis points year-over-year
- Orders increased 4% to $4.1 billion, driven by AI program momentum
- Record year-to-date cash flow, with free cash flow up 36% to $2.0 billion
- Q4 FY24 guidance projects 9% year-over-year growth in adjusted EPS
- Reported net sales declined 1% year-over-year to $4.0 billion
- Q4 guidance includes a $0.10 year-over-year headwind from tax and currency exchange rates
The recent quarterly results of TE Connectivity reflect a strong financial performance and strategic execution. The reported net sales of
One key highlight is the operating margin expansion to
For retail investors, these results underscore the company's resilience and growth potential, particularly in the Transportation, Industrial and Communications segments. The company's strategic focus on AI programs and long-term growth trends could drive sustainable earnings growth.
TE Connectivity's quarterly performance reveals significant market trends and strategic positioning. The
The Communications segment's sales growth of more than
Looking ahead, investors should consider the company's guidance for Q4 FY24, which anticipates net sales of approximately
TE Connectivity's strong performance, particularly in its Communications segment, underscores the growing importance of artificial intelligence (AI) in its business model. The substantial sales growth of over
The company's investments in AI-related technologies and its ability to secure multiple high-profile customers demonstrate its competitive advantage and innovation capacity. This aligns with broader industry trends where AI integration is becoming a key differentiator for tech-forward companies.
For investors, this emphasis on AI not only promises near-term revenue growth but also long-term strategic benefits as TE Connectivity continues to expand its technological capabilities and market reach. It’s essential to monitor how these AI initiatives translate into sustained financial performance and market position.
Delivered EPS above guidance driven by strong margin expansion; Record year-to-date cash flow
Third Quarter Highlights
- Net sales were
, in line with guidance, down$4.0 billion 1% on a reported basis year over year and up2% organically. - GAAP diluted earnings per share (EPS) from continuing operations were
, up$1.86 11% year over year. Adjusted EPS exceeded guidance at , a quarterly record and up$1.91 8% year over year. - Orders were
, up$4.1 billion 4% year over year and3% sequentially, driven by momentum in artificial intelligence programs. - Operating margins were
19% and adjusted operating margins were19.3% , up 200 basis points year over year and a quarterly record, driven by strong operational performance. - Generated record cash flow year to date, including:
- Cash from operating activities of
, up$2.4 billion 22% year over year. - Free cash flow of approximately
, up$2.0 billion 36% year over year.
- Cash from operating activities of
- Deployed over
of capital year to date, with$2.2 billion returned to shareholders$1.8 billion
"I'm pleased that our team continued to navigate a dynamic market environment to deliver another strong quarter of performance, highlighted by operating margin expansion of 200 basis points, delivering EPS above guidance and record cash flow generation," said TE Connectivity CEO Terrence Curtin. "In our Transportation Segment, our automotive business grew
Fourth Quarter FY24 Outlook
For the fourth quarter of fiscal 2024, the company expects net sales of approximately
Information about TE Connectivity's use of non-GAAP financial measures is provided below. For reconciliations of these non-GAAP financial measures, see the attached tables.
Conference Call and Webcast
The company will hold a conference call for investors today beginning at 8:30 a.m. ET. The conference call may be accessed in the following ways:
- At TE Connectivity's website: investors.te.com
- By telephone: For both "listen-only" participants and those participants who wish to take part in the question-and-answer portion of the call, the dial-in number in
the United States is (800) 715-9871 and for international callers, the dial-in number is (646) 307-1963. - A replay of the conference call will be available on TE Connectivity's investor website at investors.te.com at 11:30 a.m. ET on July 24, 2024.
About TE Connectivity
TE Connectivity Ltd. (NYSE: TEL) is a global industrial technology leader creating a safer, sustainable, productive, and connected future. Our broad range of connectivity and sensor solutions enable the distribution of power, signal and data to advance next-generation transportation, renewable energy, automated factories, data centers, medical technology and more. With more than 85,000 employees, including 8,000 engineers, working alongside customers in approximately 140 countries, TE ensures that EVERY CONNECTION COUNTS. Learn more at www.te.com and on LinkedIn, Facebook, WeChat, Instagram and X (formerly Twitter).
Non-GAAP Financial Measures
We present non-GAAP performance and liquidity measures as we believe it is appropriate for investors to consider adjusted financial measures in addition to results in accordance with accounting principles generally accepted in the
The following provides additional information regarding our non-GAAP financial measures:
- Organic Net Sales Growth (Decline) – represents net sales growth (decline) (the most comparable GAAP financial measure) excluding the impact of foreign currency exchange rates, and acquisitions and divestitures that occurred in the preceding twelve months, if any. Organic Net Sales Growth (Decline) is a useful measure of our performance because it excludes items that are not completely under management's control, such as the impact of changes in foreign currency exchange rates, and items that do not reflect the underlying growth of the company, such as acquisition and divestiture activity. This measure is a significant component in our incentive compensation plans.
- Adjusted Operating Income and Adjusted Operating Margin – represent operating income and operating margin, respectively, (the most comparable GAAP financial measures) before special items including restructuring and other charges, acquisition-related charges, impairment of goodwill, and other income or charges, if any. We utilize these adjusted measures in combination with operating income and operating margin to assess segment level operating performance and to provide insight to management in evaluating segment operating plan execution and market conditions. Adjusted Operating Income is a significant component in our incentive compensation plans.
- Adjusted Income Tax (Expense) Benefit and Adjusted Effective Tax Rate – represent income tax (expense) benefit and effective tax rate, respectively, (the most comparable GAAP financial measures) after adjusting for the tax effect of special items including restructuring and other charges, acquisition-related charges, impairment of goodwill, other income or charges, and certain significant tax items, if any.
- Adjusted Income from Continuing Operations – represents income from continuing operations (the most comparable GAAP financial measure) before special items including restructuring and other charges, acquisition-related charges, impairment of goodwill, other income or charges, and certain significant tax items, if any, and, if applicable, the related tax effects.
- Adjusted Earnings Per Share – represents diluted earnings per share from continuing operations (the most comparable GAAP financial measure) before special items including restructuring and other charges, acquisition-related charges, impairment of goodwill, other income or charges, and certain significant tax items, if any, and, if applicable, the related tax effects. This measure is a significant component in our incentive compensation plans.
- Free Cash Flow (FCF) – is a useful measure of our ability to generate cash. The difference between net cash provided by operating activities (the most comparable GAAP financial measure) and Free Cash Flow consists mainly of significant cash outflows and inflows that we believe are useful to identify. We believe Free Cash Flow provides useful information to investors as it provides insight into the primary cash flow metric used by management to monitor and evaluate cash flows generated from our operations. Free Cash Flow is defined as net cash provided by operating activities excluding voluntary pension contributions and the cash impact of special items, if any, minus net capital expenditures. Voluntary pension contributions are excluded from the GAAP financial measure because this activity is driven by economic financing decisions rather than operating activity. Certain special items, including cash paid (collected) pursuant to collateral requirements related to cross-currency swap contracts, are also excluded by management in evaluating Free Cash Flow. Net capital expenditures consist of capital expenditures less proceeds from the sale of property, plant, and equipment. These items are subtracted because they represent long-term commitments. In the calculation of Free Cash Flow, we subtract certain cash items that are ultimately within management's and the Board of Directors' discretion to direct and may imply that there is less or more cash available for our programs than the most comparable GAAP financial measure indicates. It should not be inferred that the entire Free Cash Flow amount is available for future discretionary expenditures, as our definition of Free Cash Flow does not consider certain non-discretionary expenditures, such as debt payments. In addition, we may have other discretionary expenditures, such as discretionary dividends, share repurchases, and business acquisitions, that are not considered in the calculation of Free Cash Flow.
Forward-Looking Statements
This release contains certain "forward-looking statements" within the meaning of the
TE CONNECTIVITY LTD. | |||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||
For the Quarters Ended | For the Nine Months Ended | ||||||||||
June 28, | June 30, | June 28, | June 30, | ||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
(in millions, except per share data) | |||||||||||
Net sales | $ | 3,979 | $ | 3,998 | $ | 11,777 | $ | 11,999 | |||
Cost of sales | 2,593 | 2,699 | 7,704 | 8,229 | |||||||
Gross margin | 1,386 | 1,299 | 4,073 | 3,770 | |||||||
Selling, general, and administrative expenses | 431 | 431 | 1,299 | 1,258 | |||||||
Research, development, and engineering expenses | 189 | 176 | 546 | 534 | |||||||
Acquisition and integration costs | 5 | 9 | 16 | 26 | |||||||
Restructuring and other charges, net | 6 | 53 | 67 | 283 | |||||||
Operating income | 755 | 630 | 2,145 | 1,669 | |||||||
Interest income | 20 | 18 | 61 | 39 | |||||||
Interest expense | (18) | (20) | (55) | (61) | |||||||
Other expense, net | (3) | (4) | (11) | (13) | |||||||
Income from continuing operations before income taxes | 754 | 624 | 2,140 | 1,634 | |||||||
Income tax (expense) benefit | (181) | (96) | 778 | (283) | |||||||
Income from continuing operations | 573 | 528 | 2,918 | 1,351 | |||||||
Income (loss) from discontinued operations, net of income taxes | — | — | (1) | 7 | |||||||
Net income | $ | 573 | $ | 528 | $ | 2,917 | $ | 1,358 | |||
Basic earnings per share: | |||||||||||
Income from continuing operations | $ | 1.87 | $ | 1.68 | $ | 9.47 | $ | 4.28 | |||
Income (loss) from discontinued operations | — | — | — | 0.02 | |||||||
Net income | 1.87 | 1.68 | 9.47 | 4.30 | |||||||
Diluted earnings per share: | |||||||||||
Income from continuing operations | $ | 1.86 | $ | 1.67 | $ | 9.41 | $ | 4.25 | |||
Income (loss) from discontinued operations | — | — | — | 0.02 | |||||||
Net income | 1.86 | 1.67 | 9.41 | 4.27 | |||||||
Weighted-average number of shares outstanding: | |||||||||||
Basic | 306 | 315 | 308 | 316 | |||||||
Diluted | 308 | 317 | 310 | 318 |
TE CONNECTIVITY LTD. | |||||
CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||
June 28, | September 29, | ||||
2024 | 2023 | ||||
(in millions, except share data) | |||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 1,469 | $ | 1,661 | |
Accounts receivable, net of allowance for doubtful accounts of | 2,889 | 2,967 | |||
Inventories | 2,669 | 2,552 | |||
Prepaid expenses and other current assets | 686 | 712 | |||
Total current assets | 7,713 | 7,892 | |||
Property, plant, and equipment, net | 3,758 | 3,754 | |||
Goodwill | 5,664 | 5,463 | |||
Intangible assets, net | 1,177 | 1,175 | |||
Deferred income taxes | 3,768 | 2,600 | |||
Other assets | 818 | 828 | |||
Total assets | $ | 22,898 | $ | 21,712 | |
Liabilities, redeemable noncontrolling interests, and shareholders' equity | |||||
Current liabilities: | |||||
Short-term debt | $ | 1,249 | $ | 682 | |
Accounts payable | 1,662 | 1,563 | |||
Accrued and other current liabilities | 2,206 | 2,218 | |||
Total current liabilities | 5,117 | 4,463 | |||
Long-term debt | 2,953 | 3,529 | |||
Long-term pension and postretirement liabilities | 720 | 728 | |||
Deferred income taxes | 186 | 185 | |||
Income taxes | 386 | 365 | |||
Other liabilities | 781 | 787 | |||
Total liabilities | 10,143 | 10,057 | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 123 | 104 | |||
Shareholders' equity: | |||||
Common shares, | 139 | 142 | |||
Accumulated earnings | 14,253 | 12,947 | |||
Treasury shares, at cost, 12,129,385 and 10,487,742 shares, respectively | (1,647) | (1,380) | |||
Accumulated other comprehensive loss | (113) | (158) | |||
Total shareholders' equity | 12,632 | 11,551 | |||
Total liabilities, redeemable noncontrolling interests, and shareholders' equity | $ | 22,898 | $ | 21,712 |
TE CONNECTIVITY LTD. | |||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||||
For the Quarters Ended | For the Nine Months Ended | ||||||||||
June 28, | June 30, | June 28, | June 30, | ||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
(in millions) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 573 | $ | 528 | $ | 2,917 | $ | 1,358 | |||
(Income) loss from discontinued operations, net of income taxes | — | — | 1 | (7) | |||||||
Income from continuing operations | 573 | 528 | 2,918 | 1,351 | |||||||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 208 | 200 | 594 | 594 | |||||||
Deferred income taxes | 22 | (51) | (1,190) | (121) | |||||||
Non-cash lease cost | 33 | 36 | 100 | 106 | |||||||
Provision for losses on accounts receivable and inventories | 15 | 13 | 70 | 82 | |||||||
Share-based compensation expense | 31 | 32 | 100 | 95 | |||||||
Impairment of held for sale business | — | — | — | 67 | |||||||
Other | (11) | 17 | 53 | 85 | |||||||
Changes in assets and liabilities, net of the effects of acquisitions and divestitures: | |||||||||||
Accounts receivable, net | 10 | 22 | 82 | (202) | |||||||
Inventories | 114 | (50) | (127) | (323) | |||||||
Prepaid expenses and other current assets | 13 | (5) | 12 | (30) | |||||||
Accounts payable | 44 | (36) | 99 | 68 | |||||||
Accrued and other current liabilities | (37) | 69 | (324) | (14) | |||||||
Income taxes | 13 | 16 | 28 | 51 | |||||||
Other | (22) | (12) | 20 | 185 | |||||||
Net cash provided by operating activities | 1,006 | 779 | 2,435 | 1,994 | |||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (149) | (166) | (467) | (538) | |||||||
Proceeds from sale of property, plant, and equipment | 10 | 1 | 12 | 3 | |||||||
Acquisition of businesses, net of cash acquired | — | — | (339) | (108) | |||||||
Proceeds from divestiture of businesses, net of cash retained by businesses sold | 21 | (3) | 59 | 48 | |||||||
Other | 1 | (1) | (9) | 22 | |||||||
Net cash used in investing activities | (117) | (169) | (744) | (573) | |||||||
Cash flows from financing activities: | |||||||||||
Net increase (decrease) in commercial paper | 18 | 3 | (21) | (82) | |||||||
Proceeds from issuance of debt | — | — | — | 499 | |||||||
Repayment of debt | (1) | — | (2) | (591) | |||||||
Proceeds from exercise of share options | 19 | 13 | 52 | 33 | |||||||
Repurchase of common shares | (416) | (208) | (1,301) | (674) | |||||||
Payment of common share dividends to shareholders | (199) | (186) | (564) | (541) | |||||||
Other | (12) | (2) | (39) | (30) | |||||||
Net cash used in financing activities | (591) | (380) | (1,875) | (1,386) | |||||||
Effect of currency translation on cash | (5) | (4) | (8) | 8 | |||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash | 293 | 226 | (192) | 43 | |||||||
Cash, cash equivalents, and restricted cash at beginning of period | 1,176 | 905 | 1,661 | 1,088 | |||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 1,469 | $ | 1,131 | $ | 1,469 | $ | 1,131 | |||
Supplemental cash flow information: | |||||||||||
Interest paid on debt, net | $ | 6 | $ | 9 | $ | 38 | $ | 48 | |||
Income taxes paid, net of refunds | 146 | 131 | 384 | 354 |
TE CONNECTIVITY LTD. | |||||||||||
RECONCILIATION OF FREE CASH FLOW (UNAUDITED) | |||||||||||
For the Quarters Ended | For the Nine Months Ended | ||||||||||
June 28, | June 30, | June 28, | June 30, | ||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
(in millions) | |||||||||||
Net cash provided by operating activities | $ | 1,006 | $ | 779 | $ | 2,435 | $ | 1,994 | |||
Capital expenditures, net | (139) | (165) | (455) | (535) | |||||||
Free cash flow (1) | $ | 867 | $ | 614 | $ | 1,980 | $ | 1,459 | |||
(1) Free cash flow is a non-GAAP financial measure. See description of non-GAAP financial measures. |
TE CONNECTIVITY LTD. | |||||||||||||||||||||||
CONSOLIDATED SEGMENT DATA (UNAUDITED) | |||||||||||||||||||||||
For the Quarters Ended | For the Nine Months Ended | ||||||||||||||||||||||
June 28, | June 30, | June 28, | June 30, | ||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||
Net Sales | Net Sales | Net Sales | Net Sales | ||||||||||||||||||||
Transportation Solutions | $ | 2,330 | $ | 2,433 | $ | 7,087 | $ | 7,175 | |||||||||||||||
Industrial Solutions | 1,133 | 1,141 | 3,301 | 3,392 | |||||||||||||||||||
Communications Solutions | 516 | 424 | 1,389 | 1,432 | |||||||||||||||||||
Total | $ | 3,979 | $ | 3,998 | $ | 11,777 | $ | 11,999 | |||||||||||||||
Operating | Operating | Operating | Operating | Operating | Operating | Operating | Operating | ||||||||||||||||
Income | Margin | Income | Margin | Income | Margin | Income | Margin | ||||||||||||||||
Transportation Solutions | $ | 498 | 21.4 | % | $ | 425 | 17.5 | % | $ | 1,443 | 20.4 | % | $ | 1,040 | 14.5 | % | |||||||
Industrial Solutions | 153 | 13.5 | 150 | 13.1 | 451 | 13.7 | 440 | 13.0 | |||||||||||||||
Communications Solutions | 104 | 20.2 | 55 | 13.0 | 251 | 18.1 | 189 | 13.2 | |||||||||||||||
Total | $ | 755 | 19.0 | % | $ | 630 | 15.8 | % | $ | 2,145 | 18.2 | % | $ | 1,669 | 13.9 | % | |||||||
Adjusted | Adjusted | Adjusted | Adjusted | Adjusted | Adjusted | Adjusted | Adjusted | ||||||||||||||||
Operating | Operating | Operating | Operating | Operating | Operating | Operating | Operating | ||||||||||||||||
Income (1) | Margin (1) | Income (1) | Margin (1) | Income (1) | Margin (1) | Income (1) | Margin (1) | ||||||||||||||||
Transportation Solutions | $ | 490 | 21.0 | % | $ | 452 | 18.6 | % | $ | 1,471 | 20.8 | % | $ | 1,221 | 17.0 | % | |||||||
Industrial Solutions | 171 | 15.1 | 180 | 15.8 | 499 | 15.1 | 529 | 15.6 | |||||||||||||||
Communications Solutions | 105 | 20.3 | 60 | 14.2 | 262 | 18.9 | 228 | 15.9 | |||||||||||||||
Total | $ | 766 | 19.3 | % | $ | 692 | 17.3 | % | $ | 2,232 | 19.0 | % | $ | 1,978 | 16.5 | % | |||||||
(1) Adjusted operating income and adjusted operating margin are non-GAAP financial measures. See description of non-GAAP financial measures. |
TE CONNECTIVITY LTD. | |||||||||||||||||
RECONCILIATION OF NET SALES GROWTH (DECLINE) (UNAUDITED) | |||||||||||||||||
Change in Net Sales for the Quarter Ended June 28, 2024 | |||||||||||||||||
versus Net Sales for the Quarter Ended June 30, 2023 | |||||||||||||||||
Net Sales | Organic Net Sales | Acquisition/ | |||||||||||||||
Growth (Decline) | Growth (Decline) (1) | Translation (2) | (Divestiture) | ||||||||||||||
($ in millions) | |||||||||||||||||
Transportation Solutions (3): | |||||||||||||||||
Automotive | $ | (20) | (1.1) | % | $ | 63 | 3.6 | % | $ | (39) | $ | (44) | |||||
Commercial transportation | (40) | (9.9) | (34) | (8.4) | (6) | — | |||||||||||
Sensors | (43) | (15.2) | (37) | (13.1) | (6) | — | |||||||||||
Total | (103) | (4.2) | (8) | (0.3) | (51) | (44) | |||||||||||
Industrial Solutions (3): | |||||||||||||||||
Industrial equipment | (70) | (16.5) | (98) | (23.6) | (8) | 36 | |||||||||||
Aerospace, defense, and marine | 52 | 17.7 | 53 | 18.7 | (1) | — | |||||||||||
Energy | (4) | (1.7) | 8 | 3.4 | (12) | — | |||||||||||
Medical | 14 | 7.2 | 14 | 7.2 | — | — | |||||||||||
Total | (8) | (0.7) | (23) | (2.1) | (21) | 36 | |||||||||||
Communications Solutions (3): | |||||||||||||||||
Data and devices | 77 | 30.6 | 80 | 31.8 | (3) | — | |||||||||||
Appliances | 15 | 8.7 | 20 | 11.7 | (5) | — | |||||||||||
Total | 92 | 21.7 | 100 | 23.7 | (8) | — | |||||||||||
Total | $ | (19) | (0.5) | % | $ | 69 | 1.7 | % | $ | (80) | $ | (8) | |||||
Change in Net Sales for the Nine Months Ended June 28, 2024 | |||||||||||||||||
versus Net Sales for the Nine Months Ended June 30, 2023 | |||||||||||||||||
Net Sales | Organic Net Sales | Acquisitions/ | |||||||||||||||
Growth (Decline) | Growth (Decline) (1) | Translation (2) | (Divestitures) | ||||||||||||||
($ in millions) | |||||||||||||||||
Transportation Solutions (3): | |||||||||||||||||
Automotive | $ | 61 | 1.2 | % | $ | 220 | 4.2 | % | $ | (46) | $ | (113) | |||||
Commercial transportation | (53) | (4.6) | (49) | (4.2) | (4) | — | |||||||||||
Sensors | (96) | (11.6) | (90) | (10.9) | (6) | — | |||||||||||
Total | (88) | (1.2) | 81 | 1.1 | (56) | (113) | |||||||||||
Industrial Solutions (3): | |||||||||||||||||
Industrial equipment | (279) | (21.2) | (344) | (26.2) | — | 65 | |||||||||||
Aerospace, defense, and marine | 122 | 14.3 | 137 | 16.2 | 3 | (18) | |||||||||||
Energy | 13 | 2.0 | 12 | 1.8 | (19) | 20 | |||||||||||
Medical | 53 | 9.3 | 53 | 9.3 | — | — | |||||||||||
Total | (91) | (2.7) | (142) | (4.2) | (16) | 67 | |||||||||||
Communications Solutions (3): | |||||||||||||||||
Data and devices | 12 | 1.4 | 17 | 2.0 | (5) | — | |||||||||||
Appliances | (55) | (9.8) | (46) | (8.2) | (9) | — | |||||||||||
Total | (43) | (3.0) | (29) | (2.0) | (14) | — | |||||||||||
Total | $ | (222) | (1.9) | % | $ | (90) | (0.7) | % | $ | (86) | $ | (46) | |||||
(1) Organic net sales growth (decline) is a non-GAAP financial measure. See description of non-GAAP financial measures. | |||||||||||||||||
(2) Represents the change in net sales resulting from changes in foreign currency exchange rates. | |||||||||||||||||
(3) Industry end market information is presented consistently with our internal management reporting and may be periodically revised as management deems necessary. |
TE CONNECTIVITY LTD. | |||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES | |||||||||||||
For the Quarter Ended June 28, 2024 | |||||||||||||
(UNAUDITED) | |||||||||||||
Adjustments | |||||||||||||
Acquisition- | Restructuring | ||||||||||||
Related | and Other | Adjusted | |||||||||||
Charges (1) | Charges, Net (1) | (Non-GAAP) (2) | |||||||||||
($ in millions, except per share data) | |||||||||||||
Operating income: | |||||||||||||
Transportation Solutions | $ | 498 | $ | — | $ | (8) | $ | 490 | |||||
Industrial Solutions | 153 | 5 | 13 | 171 | |||||||||
Communications Solutions | 104 | — | 1 | 105 | |||||||||
Total | $ | 755 | $ | 5 | $ | 6 | $ | 766 | |||||
Operating margin | 19.0 | % | 19.3 | % | |||||||||
Income tax expense | $ | (181) | $ | — | $ | 4 | $ | (177) | |||||
Effective tax rate | 24.0 | % | 23.1 | % | |||||||||
Income from continuing operations | $ | 573 | $ | 5 | $ | 10 | $ | 588 | |||||
Diluted earnings per share from continuing operations | $ | 1.86 | $ | 0.02 | $ | 0.03 | $ | 1.91 | |||||
(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction. | |||||||||||||
(2) See description of non-GAAP financial measures. |
TE CONNECTIVITY LTD. | |||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES | |||||||||||||
For the Quarter Ended June 30, 2023 | |||||||||||||
(UNAUDITED) | |||||||||||||
Adjustments | |||||||||||||
Acquisition- | Restructuring | ||||||||||||
Related | and Other | Adjusted | |||||||||||
Charges (1) | Charges, Net (1) | (Non-GAAP) (2) | |||||||||||
($ in millions, except per share data) | |||||||||||||
Operating income: | |||||||||||||
Transportation Solutions | $ | 425 | $ | — | $ | 27 | $ | 452 | |||||
Industrial Solutions | 150 | 8 | 22 | 180 | |||||||||
Communications Solutions | 55 | 1 | 4 | 60 | |||||||||
Total | $ | 630 | $ | 9 | $ | 53 | $ | 692 | |||||
Operating margin | 15.8 | % | 17.3 | % | |||||||||
Income tax expense | $ | (96) | $ | (2) | $ | (27) | $ | (125) | |||||
Effective tax rate | 15.4 | % | 18.2 | % | |||||||||
Income from continuing operations | $ | 528 | $ | 7 | $ | 26 | $ | 561 | |||||
Diluted earnings per share from continuing operations | $ | 1.67 | $ | 0.02 | $ | 0.08 | $ | 1.77 | |||||
(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction. | |||||||||||||
(2) See description of non-GAAP financial measures. |
TE CONNECTIVITY LTD. | ||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES | ||||||||||||||||
For the Nine Months Ended June 28, 2024 | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
Adjustments | ||||||||||||||||
Acquisition- | Restructuring | |||||||||||||||
Related | and Other | Adjusted | ||||||||||||||
Charges (1) | Charges, Net (1) | Tax Items (2) | (Non-GAAP) (3) | |||||||||||||
($ in millions, except per share data) | ||||||||||||||||
Operating income: | ||||||||||||||||
Transportation Solutions | $ | 1,443 | $ | — | $ | 25 | $ | 3 | $ | 1,471 | ||||||
Industrial Solutions | 451 | 15 | 32 | 1 | 499 | |||||||||||
Communications Solutions | 251 | 1 | 10 | — | 262 | |||||||||||
Total | $ | 2,145 | $ | 16 | $ | 67 | $ | 4 | $ | 2,232 | ||||||
Operating margin | 18.2 | % | 19.0 | % | ||||||||||||
Income tax (expense) benefit | $ | 778 | $ | (2) | $ | (7) | $ | (1,254) | $ | (485) | ||||||
Effective tax rate | (36.4) | % | 21.8 | % | ||||||||||||
Income from continuing operations | $ | 2,918 | $ | 14 | $ | 60 | $ | (1,250) | $ | 1,742 | ||||||
Diluted earnings per share from continuing operations | $ | 9.41 | $ | 0.05 | $ | 0.19 | $ | (4.03) | $ | 5.62 | ||||||
(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction. | ||||||||||||||||
(2) Includes an | ||||||||||||||||
(3) See description of non-GAAP financial measures. |
TE CONNECTIVITY LTD. | |||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES | |||||||||||||
For the Nine Months Ended June 30, 2023 | |||||||||||||
(UNAUDITED) | |||||||||||||
Adjustments | |||||||||||||
Acquisition- | Restructuring | ||||||||||||
Related | and Other | Adjusted | |||||||||||
Charges (1) | Charges, Net (1) | (Non-GAAP) (2) | |||||||||||
($ in millions, except per share data) | |||||||||||||
Operating income: | |||||||||||||
Transportation Solutions | $ | 1,040 | $ | 2 | $ | 179 | $ | 1,221 | |||||
Industrial Solutions | 440 | 21 | 68 | 529 | |||||||||
Communications Solutions | 189 | 3 | 36 | 228 | |||||||||
Total | $ | 1,669 | $ | 26 | $ | 283 | $ | 1,978 | |||||
Operating margin | 13.9 | % | 16.5 | % | |||||||||
Income tax expense | $ | (283) | $ | (5) | $ | (82) | $ | (370) | |||||
Effective tax rate | 17.3 | % | 19.0 | % | |||||||||
Income from continuing operations | $ | 1,351 | $ | 21 | $ | 201 | $ | 1,573 | |||||
Diluted earnings per share from continuing operations | $ | 4.25 | $ | 0.07 | $ | 0.63 | $ | 4.95 | |||||
(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction. | |||||||||||||
(2) See description of non-GAAP financial measures. |
TE CONNECTIVITY LTD. | ||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES | ||||||||||||||||
For the Quarter Ended September 29, 2023 | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
Adjustments | ||||||||||||||||
Acquisition- | Restructuring | |||||||||||||||
Related | and Other | Adjusted | ||||||||||||||
Charges (1) | Charges, Net (1) | Tax Items (2) | (Non-GAAP) (3) | |||||||||||||
($ in millions, except per share data) | ||||||||||||||||
Operating income: | ||||||||||||||||
Transportation Solutions | $ | 411 | $ | 1 | $ | 32 | $ | — | $ | 444 | ||||||
Industrial Solutions | 162 | 6 | 16 | — | 184 | |||||||||||
Communications Solutions | 62 | — | 9 | — | 71 | |||||||||||
Total | $ | 635 | $ | 7 | $ | 57 | $ | — | $ | 699 | ||||||
Operating margin | 15.7 | % | 17.3 | % | ||||||||||||
Income tax expense | $ | (81) | $ | (1) | $ | (3) | $ | (49) | $ | (134) | ||||||
Effective tax rate | 12.8 | % | 19.2 | % | ||||||||||||
Income from continuing operations | $ | 553 | $ | 6 | $ | 54 | $ | (49) | $ | 564 | ||||||
Diluted earnings per share from continuing operations | $ | 1.75 | $ | 0.02 | $ | 0.17 | $ | (0.16) | $ | 1.78 | ||||||
(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction. | ||||||||||||||||
(2) Represents income tax benefits associated with a decrease in the valuation allowance for certain tax loss and credit carryforwards. | ||||||||||||||||
(3) See description of non-GAAP financial measures. |
TE CONNECTIVITY LTD. | ||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL MEASURES | ||||||||||||||||
For the Year Ended September 29, 2023 | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
Adjustments | ||||||||||||||||
Acquisition- | Restructuring | |||||||||||||||
Related | and Other | Adjusted | ||||||||||||||
Charges (1) | Charges, Net (1) | Tax Items (2) | (Non-GAAP) (3) | |||||||||||||
($ in millions, except per share data) | ||||||||||||||||
Operating income: | ||||||||||||||||
Transportation Solutions | $ | 1,451 | $ | 3 | $ | 211 | $ | — | $ | 1,665 | ||||||
Industrial Solutions | 602 | 27 | 84 | — | 713 | |||||||||||
Communications Solutions | 251 | 3 | 45 | — | 299 | |||||||||||
Total | $ | 2,304 | $ | 33 | $ | 340 | $ | — | $ | 2,677 | ||||||
Operating margin | 14.4 | % | 16.7 | % | ||||||||||||
Income tax expense | $ | (364) | $ | (6) | $ | (85) | $ | (49) | $ | (504) | ||||||
Effective tax rate | 16.0 | % | 19.1 | % | ||||||||||||
Income from continuing operations | $ | 1,904 | $ | 27 | $ | 255 | $ | (49) | $ | 2,137 | ||||||
Diluted earnings per share from continuing operations | $ | 6.01 | $ | 0.09 | $ | 0.80 | $ | (0.15) | $ | 6.74 | ||||||
(1) The tax effect of each non-GAAP adjustment is calculated based on the jurisdictions in which the expense (income) is incurred and the tax laws in effect for each such jurisdiction. | ||||||||||||||||
(2) Represents income tax benefits associated with a decrease in the valuation allowance for certain tax loss and credit carryforwards. | ||||||||||||||||
(3) See description of non-GAAP financial measures. |
TE CONNECTIVITY LTD. | |||
RECONCILIATION OF FORWARD-LOOKING NON-GAAP FINANCIAL MEASURES | |||
TO FORWARD-LOOKING GAAP FINANCIAL MEASURES | |||
As of July 24, 2024 | |||
(UNAUDITED) | |||
Outlook for | |||
Quarter Ending | |||
September 27, | |||
2024 | |||
Diluted earnings per share from continuing operations | $ | 1.80 | |
Restructuring and other charges, net | 0.12 | ||
Acquisition-related charges | 0.02 | ||
Adjusted diluted earnings per share from continuing operations (1) | $ | 1.94 | |
Net sales growth (decline) | (0.9) | % | |
Translation | 1.4 | ||
(Acquisitions) divestitures, net | 0.2 | ||
Organic net sales growth (1) | 0.7 | % | |
(1) See description of non-GAAP financial measures. |
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SOURCE TE Connectivity, LTD
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