TE Connectivity Stock Rises on Q4 Earnings Beat, Revenues Up Y/Y

Core Insights - TE Connectivity (TEL) reported adjusted earnings of $2.44 per share for Q4 fiscal 2025, a 25.1% increase year-over-year, surpassing the Zacks Consensus Estimate by 6.55% [1][8] - Net sales reached $4.75 billion, exceeding consensus estimates by 4.28% and reflecting a 17% increase year-over-year, with 11% organic growth [1][8] - The growth was primarily driven by the Industrial and Transportation segments, with orders increasing to $4.7 billion, up 22% year-over-year [2][3] Q4 Financial Performance - The Transportation solutions segment generated revenues of $2.41 billion, accounting for 50.8% of net sales, with a year-over-year increase of 3.6% [3] - Automotive sales rose by 4% year-over-year, supported by strong demand in Asia, while sensor sales declined by 4% [3] - The Industrial Solutions segment reported revenues of $2.33 billion, representing a 34% increase year-over-year [4] Segment Performance - Digital Data Networks, Automation & Connected Living, Aerospace, Defense and Marine, and Energy segments saw significant year-over-year growth of 80%, 15%, 9%, and 83%, respectively [5] - The Medical sector experienced a decline of 16% [5] Operating Metrics - GAAP gross margin expanded by 100 basis points to 35% year-over-year [6] - Selling, general, and administrative expenses decreased to 10.4% of net sales, down 20 basis points [6] - Adjusted operating margin increased by 130 basis points to 19.9% [6] Balance Sheet and Cash Flow - As of September 26, 2025, cash and cash equivalents rose to $1.25 billion from $672 million [7] - Long-term debt slightly decreased to $4.842 billion [7] - Cash generated from operations was $1.4 billion, up from $1.2 billion in the previous quarter [7][9] Q1 Guidance - For Q1 fiscal 2026, TEL expects net sales to increase by 17% year-over-year to $4.5 billion, with adjusted earnings projected at $2.53 per share, indicating a 23% growth [10]