Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores provide a framework for evaluating stocks based on value, growth, and momentum characteristics [2][3][4][5][6] Zacks Style Scores - Each stock is rated from A to F based on its value, growth, and momentum, with A being the highest score indicating better chances of outperforming the market [3] - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [3] - The Growth Score assesses a company's financial health and future growth potential through earnings and sales projections [4] - The Momentum Score identifies trends in stock prices and earnings estimates to optimize entry points for investments [5] - The VGM Score combines all three Style Scores to highlight stocks with the best value, growth, and momentum characteristics [6] Zacks Rank - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to guide investors in stock selection [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41%, significantly outperforming the S&P 500 [8] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal returns [9] Stock Highlight: TE Connectivity (TEL) - TE Connectivity is a global technology company specializing in connectivity and sensor solutions across various industries [11] - TEL currently holds a Zacks Rank of 3 (Hold) with a VGM Score of B, indicating moderate potential [11] - The stock has a Momentum Style Score of A, with a 1.6% increase in shares over the past four weeks and a positive earnings estimate revision trend [12]

Financial Performance - Net sales increased by 4.4% in Q2 2025 and 2.3% in the first six months of fiscal 2025 compared to the same periods in fiscal 2024, driven by a 17.2% increase in the Industrial Solutions segment[125]. - Transportation Solutions segment net sales decreased by 3.9% in Q2 2025 and 5.1% in the first six months of fiscal 2025 due to declines across all end markets[125]. - Industrial Solutions segment net sales increased by 17.2% in Q2 2025 and 14.1% in the first six months of fiscal 2025, primarily from growth in digital data networks, energy, and aerospace markets[125]. - The company expects Q3 2025 net sales to be approximately $4.3 billion, up from $4.0 billion in Q3 2024, with diluted earnings per share projected at $2.02[126]. - Operating income for Q2 2025 was $748 million, up $56 million from $692 million in Q2 2024, resulting in an operating margin of 18.1%[143]. - Transportation Solutions segment's operating income decreased by $32 million (6.7%) in Q2 2025 and $73 million (7.6%) in the first six months compared to the same periods in 2024, primarily due to lower volume and price erosion[151]. - Income from continuing operations was $145 million for the first six months of fiscal 2025, compared to a loss of $271 million in the same period of fiscal 2024[180]. Acquisitions and Investments - In the first six months of fiscal 2025, the company acquired two businesses for a total cash purchase price of $321 million, contributing to the Industrial Solutions segment[127]. - On April 1, 2025, the company acquired Richards Manufacturing for approximately $2.3 billion, enhancing its Energy business within the Industrial Solutions segment[128]. - The company acquired Richards Manufacturing for approximately $2.3 billion on April 1, 2025, net of cash acquired, and entered into a 364-day senior credit agreement in anticipation of the acquisition[161]. - The company acquired two businesses for a combined cash purchase price of $321 million in the first six months of fiscal 2025[164]. Cash Flow and Capital Expenditures - Net cash provided by operating activities was $1,531 million in the first six months of fiscal 2025[131]. - Cash provided by operating activities increased by $102 million to $1,531 million in the first six months of fiscal 2025, driven by higher pre-tax income and reduced income tax payments[162]. - Capital expenditures were $435 million in the first six months of fiscal 2025, with expectations of approximately 5% of net sales for capital spending levels[163]. Margins and Expenses - Gross margin increased by $96 million in Q2 2025 and $132 million in the first six months of fiscal 2025, primarily due to higher volume, with gross margin percentages at 35.2% and 35.3% respectively[137]. - Selling, general, and administrative expenses increased by $10 million in Q2 2025 compared to Q2 2024, representing 11.0% of net sales[139]. - Net restructuring charges totaled $87 million in the first half of fiscal 2025, with expected annualized cost savings of approximately $70 million by the end of fiscal 2026[141]. - Restructuring and other charges increased to $65 million in the first six months of fiscal 2025 from $36 million in the same period of 2024[152]. Market and Economic Factors - Approximately 60% of net sales were invoiced in currencies other than the U.S. dollar in the first six months of fiscal 2025, impacting reported results due to foreign currency translation[134]. - Average copper price increased to $4.22 per lb in Q2 2025 from $3.79 in Q2 2024, while gold rose to $2,459 per troy oz from $1,966[138]. - Organic net sales in the Automotive sector decreased by 1.3% in the first half of fiscal 2025, with significant declines in the EMEA and Americas regions[149]. - Digital data networks saw a significant organic net sales increase of 78.0% in Q2 2025 and 62.8% in the first six months, attributed to growth in artificial intelligence and cloud applications[157]. - Medical segment's organic net sales decreased by 13.7% in Q2 2025 and 19.0% in the first six months, primarily due to reduced demand from inventory corrections[158]. Debt and Financing - Total debt increased from $4,203 million on September 27, 2024, to $5,614 million on March 28, 2025[166]. - TEGSA issued €750 million of 3.25% senior notes due in January 2033 during the second quarter of fiscal 2025[167]. - TEGSA had $1.5 billion of commercial paper outstanding at a weighted-average interest rate of 4.64% as of March 28, 2025[168]. - The company is in compliance with all debt covenants as of March 28, 2025, and expects to maintain compliance in the foreseeable future[172]. - TEGSA has a Five-Year Credit Facility with aggregate commitments of $1.5 billion, with no borrowings as of March 28, 2025[171]. Shareholder Returns - The company declared a quarterly dividend of $0.71 per ordinary share, payable on June 10, 2025[131]. - Approximately four million ordinary shares were repurchased for $615 million during the first six months of fiscal 2025[175]. Risks and Compliance - Risks associated with current and future acquisitions and divestitures[201]. - Global risks of business interruptions due to natural disasters impacting operations and customer behaviors[201]. - Political, economic, and military instability risks, particularly from ongoing military conflicts[201]. - Cybersecurity incidents and disruptions to information technology infrastructure risks[201]. - Compliance risks with environmental laws and regulations, including climate change[201]. - Increasing scrutiny regarding environmental, social, and governance matters[201]. - Risks related to antitrust or competition laws and trade regulations compliance[201]. - Potential impacts of legislative proposals on corporate effective tax rates and U.S. government contracts[201]. - Risks associated with being an Irish corporation[201]. - Impact of fluctuations in market price of shares and unsolicited takeover proposals[201].

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]

Core Insights - TE Connectivity (TEL) reported revenue of $4.14 billion for the quarter ended March 2025, marking a year-over-year increase of 4.4% and exceeding the Zacks Consensus Estimate by 4.66% [1] - The earnings per share (EPS) for the same period was $2.10, compared to $1.86 a year ago, representing a surprise of 7.14% over the consensus estimate of $1.96 [1] Financial Performance - Net Sales in Industrial Solutions reached $1.83 billion, surpassing the average estimate of $1.69 billion by five analysts, with a year-over-year change of 60% [4] - Net Sales in Transportation Solutions amounted to $2.31 billion, slightly above the average estimate of $2.27 billion, but reflecting a year-over-year decline of 2.9% [4] - Adjusted Operating Income for Industrial Solutions was reported at $327 million, exceeding the average estimate of $286.60 million [4] - Adjusted Operating Income for Transportation Solutions was $478 million, also above the average estimate of $470.99 million [4] Stock Performance - TE Connectivity's shares have returned -11.5% over the past month, compared to a -6.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

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].