TE Connectivity Ltd. (TEL - Free Report) delivered first-quarter fiscal 2019 adjusted earnings of $1.29 per share, beating the Zacks Consensus Estimate by 2 cents. However, the figure declined 9.2% year over year and was in line with the high end of the projected range of $1.25-$1.29 per share.
Net sales in the quarter were up 0.3% year over year to $3.35 billion. Solid segmental performance, especially in the Industrial and Communications segments, drove top-line growth in the reported quarter.
However, sales lagged the Zacks Consensus Estimate of $3.38 billion.
The company’s total orders declined 6% year over year and 4% sequentially. Notably, orders from China declined 22% year over year. Moreover, weakness in global oil production and lower order levels at Transportation and Communication segments in China resulted in the overall decline in total orders.
Top Line in Detail
TE Connectivity operates in the following three organized segments.
Transportation Solutions: The segment generated $1.99 billion of sales (59.3% of net sales) in the reported quarter, down 2.3% on a year-over-year basis. The decline was primarily due to 1% organic decline in sales of automotive on lower global auto production. However, Commercial transportation witnessed 2% organic growth. Moreover, Sensor business grew 4% organically, year over year.
Industrial Solutions: This segment recorded sales of $928 million (27.7% of net sales), up 5.2% from the prior-year quarter. The segment witnessed organic growth of 5% in the reported quarter. Further, orders were up 6% organically. Strength in aerospace, defense and marine led to organic growth of 13%. Moreover, 1% organic sales decline in industrial equipment was offset by strength in medical applications.
Communications Solutions: This segment generated sales of $433 million (12.9% of net sales), which increased 2.6% year over year and experienced organic growth of 5%. This was driven by strong growth in data and devices due to high-speed connectivity in data center applications. Notably, Appliance business declined 2% organically due to weakness in Asia.
TE Connectivity Ltd. Price, Consensus and EPS Surprise