EPS above guidance driven by significant margin expansion; first quarter record cash flow.
TE Connectivity Ltd. (NYSE: TEL) today reported results for the fiscal first quarter ended Dec. 29, 2023.
First Quarter Highlights
- Net sales were $3.83 billion, in line with guidance, essentially flat on a reported basis year over year and down 1% organically.
- GAAP diluted earnings per share (EPS) from continuing operations were $5.76, including a one-time tax-related benefit, and adjusted EPS were $1.84, up 20% year over year.
- Orders were $3.8 billion, up 4% year over year, with year-over-year growth in all segments.
- Operating margins were 18.2% and adjusted operating margins were 19.1%, up 290 basis points year over year.
- Cash flow from operating activities was $719 million and free cash flow was $570 million, both first quarter records.
- Deployed approximately $1 billion of capital in the quarter, including approximately $600 million returned to shareholders and approximately $350 million used for the acquisition of Schaffner.
- Company named to the Dow Jones Sustainability Index for the 12th consecutive year.
“I’m pleased with our strong performance in our first quarter, as our teams delivered earnings above guidance driven by significant margin expansion, along with record free cash flow, in what remains a dynamic market environment,” said TE Connectivity CEO Terrence Curtin. “Our industry-leading innovations and global position in automotive connectivity, including a strong presence in Asia, once again allowed us to outperform the market and deliver year-over-year growth in our Transportation segment. In our Industrial segment, we continued to benefit from growth in renewable energy, commercial air and medical applications. Our Communications segment delivered margins in the high teens, and we anticipate revenue growth in artificial intelligence applications as we move through the year. We expect to deliver strong margin performance at the company level throughout fiscal year 2024 as we continue to execute on operational levers, while benefiting from the diversity and positioning of our portfolio around key long-term growth trends.”
Second Quarter FY24 Outlook
For the second quarter of fiscal 2024, the company expects net sales of approximately $3.95 billion. GAAP EPS from continuing operations are expected to be approximately $1.75, up 31% year over year, with adjusted EPS of approximately $1.82, up 10% year over year.
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 (888) 330-3417 and for international callers, the dial-in number is (646) 960-0804
- 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 Jan. 24, 2024.
