Summary
TE Connectivity Ltd. (TEL) reported robust financial performance for the fiscal year ended September 26, 2008, despite a challenging global economic environment. The company demonstrated strong revenue growth, driven by its Electronic Components and Network Solutions segments, with significant contributions from international markets, particularly Asia-Pacific and Europe. While gross income increased, operating margins saw some pressure due to increased raw material costs and a less favorable segment mix, with the high-growth Undersea Telecommunications segment having a lower margin than the company average. The company also incurred substantial charges related to restructuring and legacy litigation, impacting reported net income. However, the business remains well-positioned due to its broad product portfolio, strong customer relationships, and commitment to innovation, with substantial investments in research and development to drive future growth.
Financial Highlights
57 data points| Revenue | $14.37B |
| Cost of Revenue | $10.20B |
| Gross Profit | $4.17B |
| R&D Expenses | $482.00M |
| SG&A Expenses | $1.57B |
| Operating Income | $1.66B |
| Interest Expense | $190.00M |
| Net Income | $1.69B |
| EPS (Basic) | $3.49 |
| EPS (Diluted) | $3.47 |
| Shares Outstanding (Basic) | 483.00M |
| Shares Outstanding (Diluted) | 486.00M |
Key Highlights
- 1Net sales increased by 14.5% to $14.8 billion, with organic growth of 7.9%, indicating strong underlying business performance.
- 2The Electronic Components segment remained the largest contributor to net sales (74%), followed by Network Solutions (15%), Undersea Telecommunications (8%), and Wireless Systems (3%).
- 3Significant investments were made in Research and Development, totaling $530 million, to support new product development and technological advancements.
- 4The company experienced increased raw material costs, particularly for copper and gold, and faced price erosion, which partially offset strong sales volume increases.
- 5Restructuring and other charges amounted to $185 million, reflecting efforts to simplify the global manufacturing footprint and migrate facilities to lower-cost countries.
- 6A material weakness in internal control over financial reporting related to accounting for income taxes was disclosed, indicating ongoing remediation efforts.
- 7The company repurchased approximately $1.24 billion of its common shares in fiscal 2008 as part of an authorized $2.0 billion share repurchase program.