TE Connectivity(TEL) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales in Q1 fiscal 2025 were $3.836 billion, consistent with Q1 fiscal 2024, with a 6.3$3.95 billion in Q2 fiscal 2025, down from $3.97 billion in Q2 fiscal 2024, with a projected diluted loss per share of approximately$0.05[110]. - Gross margin increased by $36 million to$1.36 billion in Q1 fiscal 2025, representing 35.5% of net sales, compared to 34.6% in Q1 fiscal 2024[120]. - Operating income for Q1 fiscal 2025 was $690 million, with an operating margin of 18.0$150 million, or 6.3%, in Q1 fiscal 2025 compared to Q1 fiscal 2024, primarily due to organic net sales declines of 5.2%[130]. - Operating income in the Transportation Solutions segment decreased by $41 million to$446 million in Q1 fiscal 2025, with an operating margin of 19.9%[131]. - Industrial Solutions segment net sales increased by $155 million, or 10.8$33 million to $244 million in Q1 fiscal 2025, with an operating margin of 15.3$311 million for the quarter ending December 27, 2024, a significant improvement from a loss of $271 million in the same quarter of the previous year[153]. Cash Flow and Capital Expenditures - Net cash provided by operating activities was$878 million in Q1 fiscal 2025[109]. - Net cash provided by operating activities increased by $159 million to$878 million in Q1 fiscal 2025 from $719 million in Q1 fiscal 2024[140]. - Capital expenditures were$205 million in Q1 fiscal 2025, with expectations for capital spending to be approximately 5% of net sales[141]. Restructuring and Costs - The company incurred net restructuring charges of $43 million in Q1 fiscal 2025, with expected annualized cost savings of approximately$35 million by the end of fiscal 2026[123]. - The company anticipates total restructuring charges of approximately $100 million for fiscal 2025, with total cash spend expected to be around$200 million[123]. Shareholder Returns - Payments of ordinary/common share dividends to shareholders were $189 million in Q1 fiscal 2025, up from$183 million in Q1 fiscal 2024[148]. - The board of directors authorized an increase of $2.5 billion in the share repurchase program, with$2.4 billion remaining available as of December 27, 2024[149]. - Approximately 2 million ordinary shares were repurchased for $310 million, and 3 million common shares for$420 million during the first quarters of fiscal 2025 and 2024, respectively[149]. Debt and Assets - Total debt was $4,205 million as of December 27, 2024, compared to$4,203 million at the end of the previous quarter[144]. - Total current assets increased to $1,320 million as of December 27, 2024, compared to$1,164 million on September 27, 2024[152]. - Total noncurrent liabilities decreased to $7,431 million as of December 27, 2024, down from$10,738 million on September 27, 2024[152]. - The company has $185 million in outstanding letters of credit, including$22 million related to the divestiture of the Subsea Communications business[156]. Market Conditions and Compliance - Approximately 60% of net sales were invoiced in currencies other than the U.S. dollar in Q1 fiscal 2025, impacting reported results due to foreign currency exchange rates[117]. - The average price of copper increased to $4.09 per pound in Q1 fiscal 2025 from$3.87 in Q1 fiscal 2024, while gold rose to $2,305 per troy ounce from$1,943[121]. - Organic net sales growth is presented as a key performance measure, excluding the impact of foreign currency exchange rates and acquisitions[165]. - The company is cooperating with the U.S. State Department's Directorate of Defense Trade Controls regarding past compliance with trade controls[160]. - Forward-looking statements indicate potential growth opportunities and risks related to global economic conditions and competition[169]. - The company does not expect legal proceedings to have a material adverse effect on its financial position or cash flows[159]. Taxation - The effective tax rate for Q1 fiscal 2025 was 25.2%, compared to (158.1)% in Q1 fiscal 2024, reflecting a significant change in income tax expense[127].