01—Abstract
Summary
Summary of the 10-K filed November 10, 2010. Cited figures are marked; the original filing is the authoritative source.
TE Connectivity plc (TEL) reported strong revenue growth in fiscal year 2010, a significant rebound from the economic downturn of fiscal year 2009.
The company's net sales increased by 17.7% to $12.07 billiona, driven by a robust recovery in its Electronic Components segment, which saw a 35.4% increase in net sales. This growth reflects improved demand across key end markets, particularly automotive, which accounted for 51% of the Electronic Components segment's sales. Operationally, the company demonstrated improved profitability with a return to operating income in fiscal year 2010 ($1.52 billion) after a substantial operating loss in fiscal year 2009, largely due to a significant goodwill impairment.
The company is also strategically expanding its global reach, focusing on emerging markets, and investing in innovation, with 26% of fiscal year 2010 sales coming from new products introduced in the prior three years. Furthermore, TE Connectivity announced a significant acquisition of ADC Telecommunications, Inc. for approximately $1.25 billionb, indicating a commitment to inorganic growth and market consolidation.
02—Key points
Key Highlights
- Net sales increased by 17.7% to $12.07 billion in fiscal year 2010, a recovery from the 28.6% decline seen in fiscal year 2009.
- The Electronic Components segment was the primary driver of growth, with net sales up 35.4% to $8.07 billion, reflecting strong demand in the automotive market.
- Operating income improved significantly to $1.52 billion in fiscal year 2010, compared to an operating loss of $3.47 billion in fiscal year 2009, driven by higher sales and improved gross margins.
- The company is actively pursuing growth through strategic priorities, including strengthening innovation leadership (26% of sales from new products) and expanding in emerging markets.
- TE Connectivity announced its intention to acquire ADC Telecommunications, Inc. for approximately $1.25 billion, expected to close in fiscal year 2011, signaling a strategic move towards consolidation and expanded offerings.
- The company continues to actively manage its capital structure, repurchasing approximately $488 million of common shares in fiscal year 2010 and maintaining compliance with debt covenants.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, TE Connectivity plc kept $0.09.
- Revenue$11.68B100.0%
- Cost of revenue−$8.04B68.8%
- Gross profit$3.64B31.2%
- Operating costs−$2.19B18.8%
- Operating income$1.45B12.4%
- Interest, other & tax−$349.0M3.0%
- Net income$1.10B9.4%
Where FY2010 revenue went
$11.68B- Cost of revenue: $8.04B, 69% of revenue
- SG&A: $1.49B, 13% of revenue
- Net income: $1.10B, 9.4% of revenue
- R&D: $461.0M, 3.9% of revenue
- Other operating costs: $240.0M, 2.1% of revenue
- Interest, other & tax: $349.0M, 3.0% of revenue
Kept 9.4% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed November 10, 2010Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $11.68B$10.26B | +13.9% |
| Cost of Revenue | $8.04B$7.72B | +4.1% |
| Gross Profit | $3.64B$2.54B | +43.7% |
| R&D Expenses | $461.00M$439.00M | +5.0% |
| SG&A Expenses | $1.49B$1.41B | +5.8% |
| Operating Income | $1.45B-$3.47B | +141.8% |
| Interest Expense | $155.00M$165.00M | −6.1% |
| Net Income | $1.10B-$3.27B | +133.8% |
| EPS (Basic) | $2.43$-7.11 | +134.2% |
| EPS (Diluted) | $2.41$-7.11 | +133.9% |
| Shares Outstanding (Basic) | 453.00M459.00M | −1.3% |
| Shares Outstanding (Diluted) | 457.00M459.00M | −0.4% |
05—Questions
Frequently Asked Questions
What was TE Connectivity's financial performance in fiscal year 2010?
In fiscal year 2010, TE Connectivity showed a strong recovery with net sales increasing by 17.7% to $12.07 billion, up from $10.26 billion in fiscal year 2009. The company returned to profitability, reporting an operating income of $1.52 billion compared to an operating loss of $3.47 billion in the prior year. This improvement was primarily driven by a rebound in the Electronic Components segment, particularly in the automotive market.
What are the key growth drivers and strategic priorities for TE Connectivity?
TE Connectivity's growth is driven by its strong market positions in Electronic Components, Network Solutions, Specialty Products, and Subsea Communications. Strategic priorities include delivering extraordinary customer service, strengthening innovation leadership (with 26% of fiscal year 2010 sales from new products), achieving market leadership in attractive industries, extending leadership in emerging markets, and supplementing organic growth with strategic acquisitions. The company is also focused on expanding its global manufacturing footprint to lower-cost countries.
What significant strategic moves did TE Connectivity make in fiscal year 2010?
In fiscal year 2010, TE Connectivity announced its intention to acquire ADC Telecommunications, Inc. for approximately $1.25 billion, a move expected to close in the first quarter of fiscal year 2011. This acquisition signals a commitment to inorganic growth and expanding the company's portfolio. Additionally, the company continued its share repurchase program, buying back approximately $488 million of its common stock.
How did the company's segment performance contribute to the overall results?
The Electronic Components segment was the standout performer, with net sales growing by 35.4% to $8.07 billion, driven by strong demand in the automotive sector. The Specialty Products segment also saw growth, with net sales up 9.5% to $1.55 billion. The Network Solutions segment experienced modest growth, with net sales increasing by 0.5% to $1.73 billion. The Subsea Communications segment saw a decline in net sales by 37.6% to $724 million, primarily due to the completion of large projects in the prior year.
06—Continue