This presentation contains certain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to risks, uncertainty and changes in circumstances, which may cause actual results, performance, financial condition or achievements to differ materially from anticipated results, performance, financial condition or achievements. All statements contained herein that are not clearly hist ...

TE Connectivity plc (NYSE:TEL) Q2 2025 Earnings Conference Call April 23, 2025 8:30 AM ET Company Participants Sujal Shah - VP, IR Terrence Curtin - CEO Heath Mitts - CFO Conference Call Participants Scott Davis - Melius Mark Delaney - Goldman Sachs Amit Daryanani - Evercore ISI Wamsi Mohan - Bank of America Luke Junk - Baird Samik Chatterjee - JPMorgan Joe Giordano - TD Cowen Saree Boroditsky - Jefferies Colin Langan - Wells Fargo Christopher Glynn - Oppenheimer Asiya Merchant - Citigroup Joe Spak - UBS St ...

Core Insights - TE Connectivity (TEL) reported adjusted earnings of $2.10 per share for Q2 fiscal 2025, exceeding the Zacks Consensus Estimate by 7.14% and reflecting a 12.9% increase year-over-year [1] - Net sales reached $4.1 billion, surpassing consensus estimates by 4.66% and showing a 4% year-over-year growth, driven by the Industrial segment [1] - Orders totaled $4.25 billion, marking a 6% increase both year-over-year and sequentially [1] Revenue Breakdown - The Transportation solutions segment generated revenues of $2.31 billion, accounting for 55.9% of net sales, but declined 3.9% year-over-year on a reported basis and 2% organically [2] - Automotive sales saw a 2% decline year-over-year, with sensor sales down 12% and commercial transportation sales dropping 7%, attributed to weakness in industrial end markets in Europe and North America [3] - The Industrial Solutions segment reported revenues of $1.83 billion, representing 44.1% of net sales, with a 17% year-over-year increase on a reported basis and 16% organically [3] - Digital Data Networks, Automation & Connected Living, Aerospace, Defense and Marine, and Energy segments grew by 77%, 2%, 9%, and 19% year-over-year, respectively, while Medical experienced a 14% decline [4] Operating Performance - GAAP gross margin expanded by 90 basis points year-over-year to 35.2% [5] - Selling, general and administrative expenses as a percentage of revenues decreased by 20 basis points year-over-year to 11% [5] - Research, development, and engineering expenses as a percentage of revenues increased by 30 basis points to 4.9% [5] - Adjusted operating margin improved by 60 basis points year-over-year to 18.1% [5] Financial Position - As of March 28, 2025, cash and cash equivalents were $2.55 billion, up from $1.25 billion as of December 27, 2024 [6] - Long-term debt was $3.26 billion as of March 28, 2025, slightly down from $3.29 billion as of December 27, 2024 [6] - Cash generated from operations was $0.7 billion in the reported quarter, down from $0.9 billion in the previous quarter [6] - Free cash flow for the second quarter was $424 million, a decrease from $674 million in the previous quarter [6] Future Guidance - TE Connectivity provided positive guidance for Q3 fiscal 2025, expecting net sales to increase by 8% year-over-year to $4.3 billion [7] - Adjusted earnings are projected to be $2.06 per share, indicating an 8% year-over-year growth [8] - The Zacks Consensus Estimate for Q3 fiscal 2025 net sales is $4.13 billion, suggesting a 3.92% growth compared to the previous year [8]

TE Connectivity (TEL) reported $4.14 billion in revenue for the quarter ended March 2025, representing a year-over-year increase of 4.4%. EPS of $2.10 for the same period compares to $1.86 a year ago.The reported revenue represents a surprise of +4.66% over the Zacks Consensus Estimate of $3.96 billion. With the consensus EPS estimate being $1.96, the EPS surprise was +7.14%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Stree ...

Financial Performance - TE Connectivity reported quarterly earnings of $2.10 per share, exceeding the Zacks Consensus Estimate of $1.96 per share, and up from $1.86 per share a year ago, representing an earnings surprise of 7.14% [1] - The company posted revenues of $4.14 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.66%, compared to $3.97 billion in the same quarter last year [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2 on revenues of $4.14 billion, and for the current fiscal year, it is $8.05 on revenues of $16.12 billion [7] - The estimate revisions trend for TE Connectivity is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - TE Connectivity belongs to the Zacks Electronics - Miscellaneous Components industry, which is currently in the top 31% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Insights - TE Connectivity plc reported strong operational performance in Q2 of fiscal year 2025, achieving record adjusted EPS and exceeding guidance on both sales and earnings [3][5] - The company expects continued momentum in the third quarter, with anticipated net sales of approximately $4.30 billion, representing an 8% year-over-year increase, and GAAP EPS expected to be around $2.02, up nearly 9% year-over-year [4][5] Financial Performance - For Q2, net sales were $4.1 billion, up 4% year-over-year, with organic growth of 5%, driven by double-digit growth in the Industrial segment [10] - Adjusted EPS reached a record $2.10, reflecting a 13% increase year-over-year [10] - Operating margin was reported at 18.1%, with an adjusted operating margin of 19.4%, indicating strong operational performance across segments [10][28] Segment Performance - The Transportation segment capitalized on its leading position in Asia, maintaining strong margin performance [3] - The Industrial segment saw a 17% sales growth, driven by broad business growth and ongoing momentum in AI, aerospace, and energy applications [3][4] Strategic Outlook - The company completed the acquisition of Richards Manufacturing Co. to leverage growth opportunities in the North American utility market [10] - TE Connectivity's long-standing strategy of locating manufacturing facilities near customers is expected to help navigate the current trade environment effectively [4] Cash Flow and Shareholder Returns - Cash flow from operating activities for the first half of the fiscal year was $1.5 billion, with free cash flow of approximately $1.1 billion [10] - The company returned approximately $1 billion to shareholders and announced a 9% increase in dividends [10]

Core Viewpoint - TE Connectivity (TEL) is expected to report quarterly earnings of $1.96 per share, a 5.4% increase year-over-year, with revenues forecasted at $3.95 billion, reflecting a 0.4% decrease from the previous year [1] Earnings Estimates - Changes in earnings estimates are crucial for predicting investor reactions to the stock, with empirical studies showing a strong relationship between earnings estimate revisions and short-term price performance [2] Key Metrics Projections - Analysts estimate 'Net sales- Transportation Solutions' at $2.26 billion, indicating a -5.1% change year-over-year [4] - 'Net sales- Industrial Solutions' is projected to reach $1.69 billion, reflecting a +47.9% change from the prior year [4] - 'Net sales- Transportation Solutions- Automotive' is estimated at $1.74 billion, suggesting a -0.7% year-over-year change [5] - 'Net sales- Transportation Solutions- Sensors' is forecasted at $207.92 million, indicating a -17.2% change from the previous year [5] - 'Net sales- Industrial Solutions- Medical' is expected to be $177.44 million, reflecting a -15.9% change year-over-year [5] - 'Net sales- Industrial Solutions- Energy' is projected at $231.15 million, indicating a -1.2% change from the prior year [6] - 'Net sales- Transportation Solutions- Commercial transportation' is estimated at $325.54 million, suggesting a -15.2% year-over-year change [6] Operating Income Estimates - The consensus estimate for 'Adjusted Operating Income- Transportation Solutions' is $470.08 million, down from $486 million in the same quarter last year [7] - 'Adjusted Operating Income- Industrial Solutions' is expected to be $286.12 million, compared to $173 million in the prior year [7] Stock Performance - Over the past month, TE Connectivity shares have recorded a return of -11.6%, compared to the Zacks S&P 500 composite's -5.6% change, with a Zacks Rank 2 (Buy) indicating potential outperformance in the upcoming period [8]

Core Viewpoint - TE Connectivity (TEL) is expected to report its second-quarter fiscal 2025 earnings on April 23, with adjusted earnings projected at $1.96 per share, reflecting a 5% year-over-year growth despite currency and tax headwinds [1][2]. Financial Performance - The anticipated net sales for the fiscal second quarter are approximately $3.95 billion, indicating a slight year-over-year decline of 0.4% [2]. - The Zacks Consensus Estimate for earnings remains unchanged at $1.96 per share, suggesting a growth of 5.38% compared to the previous year [1][2]. Market Dynamics - TEL's second-quarter performance is expected to benefit from stronger order volumes, with reported orders exceeding $4 billion in the first quarter, largely driven by AI program momentum [3]. - The Digital Data Networks business is projected to have continued its strong growth, achieving 48% year-over-year growth in the first quarter, fueled by increasing AI application demand [4]. Challenges - The company anticipates facing pressure from foreign exchange headwinds, projecting a year-over-year sales impact of $110 million due to unfavorable currency movements [5]. Earnings Expectations - According to the Zacks model, TEL currently has an Earnings ESP of 0.00% and a Zacks Rank of 2, indicating a neutral outlook for an earnings beat [6].

Core Insights - TE Connectivity has achieved an 80% reduction in Scope 1 and 2 greenhouse gas emissions from September 2020 to October 2024, surpassing its initial goal of 70% [1] - The company aims for a zero waste to landfill goal, targeting at least 98% diversion of operational waste by FY2029, with 28 sites already identified for this initiative [3] - In FY2024, TE Connectivity reduced its Scope 1 and 2 emissions by 30% year over year, and has made significant progress in various sustainability initiatives [2] Sustainability Goals - TE Connectivity has exceeded its renewable electricity use goal, achieving 87% globally, which is a 7% increase from the previous year, surpassing the 80% target set for 2025 [5] - The company has reduced Scope 3 greenhouse gas emissions by 14% since 2022, working towards a 30% reduction by 2032 [5] - Philanthropic STEM programs have impacted over 5 million individuals since 2020, with a goal of reaching 10 million by 2030 [5] Safety and Operational Efficiency - TE Connectivity has achieved a record low total recordable incident rate of 0.12, aiming for a zero-incident workplace [5] - 80% of TE sites reported one or fewer recordable injuries, while 61% had zero injuries [5]

Company Overview - TE Connectivity plc (NYSE: TEL) is a global industrial technology leader focused on creating a safer, sustainable, productive, and connected future [1] - The company offers a wide range of connectivity and sensor solutions that facilitate the distribution of power, signal, and data across various sectors including transportation, energy networks, automated factories, data centers, and medical technology [1] - TE Connectivity employs over 85,000 individuals, including 9,000 engineers, and operates in approximately 130 countries [1] Financial Reporting - TE Connectivity is scheduled to report its financial results for the second quarter of fiscal 2025 before trading begins on April 23, 2025 [1] - An investor conference call will take place at 8:30 a.m. ET on the same day, with access details provided for participants [2] - A replay of the conference call will be available on the company's investor website at 11:30 a.m. ET on April 23, 2025 [2]