TE Connectivity(US:TEL)2026-01-23 14:15Sales Performance - Net sales increased by 21.7% in Q1 fiscal 2026, reaching $4.669 billion, driven by growth in Industrial Solutions (38.2%) and Transportation Solutions (10.0%) segments [82]. - Organic net sales growth was 15.0% in Q1 fiscal 2026 compared to the same period in fiscal 2025, with acquisitions contributing an additional 4.0% [82]. - The acquisition of Richards Manufacturing contributed $107 million to net sales in Q1 fiscal 2026 [82]. - Transportation Solutions segment net sales increased by $224 million, or 10.0%, in Q1 fiscal 2026 compared to Q1 fiscal 2025, driven by organic net sales growth of 7.0% and a positive impact from foreign currency translation of 3.0% [103]. - Industrial Solutions segment net sales increased by $609 million, or 38.2%, in Q1 fiscal 2026 compared to Q1 fiscal 2025, primarily due to organic net sales growth of 26.3% and a 9.5% contribution from acquisitions [107]. Financial Metrics - Gross margin increased by $379 million to $1.739 billion in Q1 fiscal 2026, with a gross margin percentage of 37.2% [89]. - Selling, general, and administrative expenses rose by $111 million to $538 million in Q1 fiscal 2026, representing 11.5% of net sales [92]. - Operating income for Q1 fiscal 2026 was $963 million, with an operating margin of 20.6% [96]. - Operating income for the Transportation Solutions segment rose by $55 million to $501 million in Q1 fiscal 2026, with an operating margin of 20.3% [104]. - Operating income for the Industrial Solutions segment increased by $218 million to $462 million in Q1 fiscal 2026, with an operating margin of 21.0% [108]. Cash Flow and Capital Expenditures - Cash provided by operating activities decreased by $13 million to $865 million in Q1 fiscal 2026 from $878 million in Q1 fiscal 2025, primarily due to changes in working capital levels [112]. - Capital expenditures were $258 million in Q1 fiscal 2026, with expectations for capital spending to be approximately 6% of net sales for the fiscal year [113]. Debt and Liabilities - Total debt as of December 26, 2025, was $5,708 million, showing a slight increase from $5,694 million as of September 26, 2025 [115]. - Total current liabilities increased to $1,369 million, up from $1,348 million [123]. - Total noncurrent liabilities increased to $11,262 million, compared to $10,033 million in the previous quarter [123]. Shareholder Returns - The company declared a quarterly cash dividend of $0.71 per ordinary share, payable on March 13, 2026 [119]. - The company repurchased ordinary shares valued at $406 million in Q1 fiscal 2026, maintaining $983 million of availability under the share repurchase authorization [120]. Assets - Total current assets increased to $1,283 million as of December 26, 2025, up from $1,236 million on September 26, 2025 [123]. - Total noncurrent assets rose to $3,223 million, compared to $2,465 million in the previous quarter [123]. Income and Recovery - Net income from continuing operations for the quarter ended December 26, 2025, was $13 million, a recovery from a loss of $197 million in the prior year [125]. Compliance and Legal Matters - The company has reserved an aggregate of $27 million related to potential unpaid duties, fees, and interest from a compliance investigation [131]. - The company does not expect legal proceedings to have a material adverse effect on its financial position or cash flows [130]. Market Outlook - Forward-looking statements indicate potential growth opportunities and risks related to market conditions and competition [140]. - The company reported organic net sales growth (decline) as a key performance measure, excluding impacts from foreign currency and acquisitions [136].