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TE Connectivity (TEL) Q4 Earnings & Sales Beat, Rise Y/Y
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TE Connectivity Ltd. (TEL - Free Report) reported fourth-quarter fiscal 2022 adjusted earnings of $1.88 per share, which surpassed the Zacks Consensus Estimate by 0.5%. The figure rose 11.2% from the year-ago fiscal quarter’s reading and 1.1%, sequentially.
Net sales in the reported quarter were $4.4 billion, which beat the consensus mark by 3.3%. The figure rose 14% on a reported basis and 21%, organically, from the respective year-ago fiscal quarter’s readings. TEL also increased 6.4%, sequentially.
Top-line growth was driven by the well-performing transportation, communications and industrial solutions of TEL.
TE Connectivity generated orders of $4.3 billion in the reported quarter, reflecting continued strong customer demand.
Transportation Solutions: The segment generated $2.45 billion, accounting for 56% of net sales. The figure grew 11% from the year-ago fiscal quarter’s actuals. TEL witnessed 14% growth in automotive sales, driven by the growing proliferation of electric vehicles. Commercial transportation sales also grew 14% from the year-ago fiscal quarter’s tally, driven by a strong performance in North America and Europe. However, sensor sales fell 2% from the year-ago fiscal quarter’s level due to portfolio optimization activities.
Industrial Solutions: The segment generated $1.25 billion, accounting for 29% of net sales. The figure rose 23% from the year-ago fiscal quarter’s reported number. This was driven by robust industrial equipment sales, which grew 35% from the prior-year fiscal quarter’s figure owing to continued benefits from factory automation applications. Aerospace, defense and marine sales improved 21% on market improvement in commercial aerospace. Solid momentum across renewable applications remained positive for TEL’s energy business, which rose 16% from the year-ago fiscal quarter’s reported figure. Medical sales’ growth of 8% from the prior-year fiscal quarter’s level was attributed to higher interventional procedures.
Communications Solutions: The segment generated $660 million, accounting for 15% of net sales. The figure was up 10% from the year-ago fiscal quarter’s actuals. This was driven by solid content growth in high-speed cloud applications, leading to a 19% rise from the year-ago fiscal quarter’s reading in data and devices sales. However, appliance sales fell 5% from the prior-year fiscal quarter’s reading, reflecting moderation in the end market.
Operating Details
Per management, the gross profit was $1.35 billion, up 6.8% from the year-earlier fiscal quarter’s level. As a percentage of revenues, the figure contracted 200 basis points (bps) from the year-ago fiscal quarter’s level to 31%.
We note that selling, general and administrative expenses, and research and development expenses of $412 million and $179 million rose 7.3% and 3.5% from the respective year-ago fiscal quarter’s actuals, respectively.
TE Connectivity’s adjusted operating margin was 17.4% in the reported quarter, which contracted 110 bps from the year-ago fiscal quarter’s reported figure.
Balance Sheet & Cash Flow
As of Sep 30, 2022, cash and cash equivalents were $1.09 billion, up from $820 million as of Jun 24, 2022.
Long-term debt was $3.29 billion in the fiscal fourth quarter, down from $3.38 billion in the prior fiscal quarter.
TE Connectivity generated $944 million of cash from operations in the reported quarter compared with $579 million in the sequential fiscal quarter. Further, it generated a free cash flow of $745 million.
TEL returned $515 million to its shareholders.
Guidance
For first-quarter fiscal 2023, TE Connectivity expects net sales of $3.75 billion with 2% growth on a reported basis from the year-ago fiscal quarter’s reading and 9% on an organic basis. The Zacks Consensus Estimate for the same is pegged at $3.95 billion.
Adjusted earnings are projected at $1.50 per share. The consensus mark is pegged at $1.74 per share.
US Foods is set to report third-quarter 2022 results on Nov 10. The Zacks Consensus Estimate for USFD’s earnings is pegged at 59 cents per share, suggesting an increase of 22.9% from the prior-year period’s reported figure. USFD has lost 15% in the year-to-date period. Its long-term earnings growth rate is currently projected at 20%.
The Trade Desk is scheduled to release third-quarter 2022 results on Nov 9. The Zacks Consensus Estimate for TTD’s earnings is pegged at 24 cents per share, suggesting an increase of 33.3% from the prior-year quarter’s reported figure. TTD has lost 42% in the year-to-date period. TTD’s long-term earnings growth rate is currently projected at 24%.
Tencent Music is scheduled to release third-quarter 2022 results on Nov 15. The Zacks Consensus Estimate for TME’s earnings is pegged at 11 cents per share, suggesting a 22.2% increase from the prior-year quarter’s reported figure. TME has lost 45.2% in the year-to-date period. TME’s long-term earnings growth rate is currently projected at 17.9%.
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TE Connectivity (TEL) Q4 Earnings & Sales Beat, Rise Y/Y
TE Connectivity Ltd. (TEL - Free Report) reported fourth-quarter fiscal 2022 adjusted earnings of $1.88 per share, which surpassed the Zacks Consensus Estimate by 0.5%. The figure rose 11.2% from the year-ago fiscal quarter’s reading and 1.1%, sequentially.
Net sales in the reported quarter were $4.4 billion, which beat the consensus mark by 3.3%. The figure rose 14% on a reported basis and 21%, organically, from the respective year-ago fiscal quarter’s readings. TEL also increased 6.4%, sequentially.
Top-line growth was driven by the well-performing transportation, communications and industrial solutions of TEL.
TE Connectivity generated orders of $4.3 billion in the reported quarter, reflecting continued strong customer demand.
TE Connectivity Ltd. Price
TE Connectivity Ltd. price | TE Connectivity Ltd. Quote
Top-Line Details
Transportation Solutions: The segment generated $2.45 billion, accounting for 56% of net sales. The figure grew 11% from the year-ago fiscal quarter’s actuals. TEL witnessed 14% growth in automotive sales, driven by the growing proliferation of electric vehicles. Commercial transportation sales also grew 14% from the year-ago fiscal quarter’s tally, driven by a strong performance in North America and Europe. However, sensor sales fell 2% from the year-ago fiscal quarter’s level due to portfolio optimization activities.
Industrial Solutions: The segment generated $1.25 billion, accounting for 29% of net sales. The figure rose 23% from the year-ago fiscal quarter’s reported number. This was driven by robust industrial equipment sales, which grew 35% from the prior-year fiscal quarter’s figure owing to continued benefits from factory automation applications. Aerospace, defense and marine sales improved 21% on market improvement in commercial aerospace. Solid momentum across renewable applications remained positive for TEL’s energy business, which rose 16% from the year-ago fiscal quarter’s reported figure. Medical sales’ growth of 8% from the prior-year fiscal quarter’s level was attributed to higher interventional procedures.
Communications Solutions: The segment generated $660 million, accounting for 15% of net sales. The figure was up 10% from the year-ago fiscal quarter’s actuals. This was driven by solid content growth in high-speed cloud applications, leading to a 19% rise from the year-ago fiscal quarter’s reading in data and devices sales. However, appliance sales fell 5% from the prior-year fiscal quarter’s reading, reflecting moderation in the end market.
Operating Details
Per management, the gross profit was $1.35 billion, up 6.8% from the year-earlier fiscal quarter’s level. As a percentage of revenues, the figure contracted 200 basis points (bps) from the year-ago fiscal quarter’s level to 31%.
We note that selling, general and administrative expenses, and research and development expenses of $412 million and $179 million rose 7.3% and 3.5% from the respective year-ago fiscal quarter’s actuals, respectively.
TE Connectivity’s adjusted operating margin was 17.4% in the reported quarter, which contracted 110 bps from the year-ago fiscal quarter’s reported figure.
Balance Sheet & Cash Flow
As of Sep 30, 2022, cash and cash equivalents were $1.09 billion, up from $820 million as of Jun 24, 2022.
Long-term debt was $3.29 billion in the fiscal fourth quarter, down from $3.38 billion in the prior fiscal quarter.
TE Connectivity generated $944 million of cash from operations in the reported quarter compared with $579 million in the sequential fiscal quarter. Further, it generated a free cash flow of $745 million.
TEL returned $515 million to its shareholders.
Guidance
For first-quarter fiscal 2023, TE Connectivity expects net sales of $3.75 billion with 2% growth on a reported basis from the year-ago fiscal quarter’s reading and 9% on an organic basis. The Zacks Consensus Estimate for the same is pegged at $3.95 billion.
Adjusted earnings are projected at $1.50 per share. The consensus mark is pegged at $1.74 per share.
Zacks Rank & Stocks to Consider
Currently, TE Connectivity carries a Zacks Rank #3 (Hold). Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like US Foods (USFD - Free Report) , The Trade Desk (TTD - Free Report) and Tencent Music Entertainment Group (TME - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
US Foods is set to report third-quarter 2022 results on Nov 10. The Zacks Consensus Estimate for USFD’s earnings is pegged at 59 cents per share, suggesting an increase of 22.9% from the prior-year period’s reported figure. USFD has lost 15% in the year-to-date period. Its long-term earnings growth rate is currently projected at 20%.
The Trade Desk is scheduled to release third-quarter 2022 results on Nov 9. The Zacks Consensus Estimate for TTD’s earnings is pegged at 24 cents per share, suggesting an increase of 33.3% from the prior-year quarter’s reported figure. TTD has lost 42% in the year-to-date period. TTD’s long-term earnings growth rate is currently projected at 24%.
Tencent Music is scheduled to release third-quarter 2022 results on Nov 15. The Zacks Consensus Estimate for TME’s earnings is pegged at 11 cents per share, suggesting a 22.2% increase from the prior-year quarter’s reported figure. TME has lost 45.2% in the year-to-date period. TME’s long-term earnings growth rate is currently projected at 17.9%.