01—Abstract
Summary
Summary of the 10-K filed November 15, 2016. Cited figures are marked; the original filing is the authoritative source.
TE Connectivity Ltd. (TEL) demonstrated resilience in its fiscal year 2016, reporting flat net sales of $12.238 billiona compared to the prior year, with organic sales growth of 1.5% signaling underlying business strength.
The company's performance was driven by a balanced contribution across its segments, with Transportation Solutions and Industrial Solutions showing sales increases, partially offset by a decline in Communications Solutions. The fiscal year benefited from an extra week, adding $238 millionb to net sales.
Notable events during the year included the acquisition of Creganna Medical and the divestiture of the Circuit Protection Devices (CPD) business, reflecting strategic portfolio management. The company also continued its commitment to shareholder returns through dividend payments and share repurchases, underscoring a focus on balancing growth initiatives with capital discipline.
02—Key points
Key Highlights
- Net sales remained flat at $12.238 billion for fiscal year 2016, with organic sales growth of 1.5%.
- Transportation Solutions segment saw a 2.4% increase in net sales, driven by the automotive market.
- Industrial Solutions segment's net sales increased by 1.1%, boosted by acquisitions and growth in industrial equipment.
- Communications Solutions segment experienced a 6.8% decline in net sales, primarily due to market weakness in data and devices.
- The company completed the acquisition of Creganna Medical and divested its Circuit Protection Devices (CPD) business.
- Fiscal 2016 benefited from an additional week, contributing $238 million in net sales and $0.13 per diluted share.
- Shareholders received dividends totaling $1.40 per share, and the company continued its share repurchase program with $1.1 billion in remaining authorization.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, TE Connectivity plc kept $0.18.
- Revenue$11.35B100.0%
- Cost of revenue−$7.53B66.3%
- Gross profit$3.83B33.7%
- Operating costs−$2.02B17.8%
- Operating income$1.81B15.9%
- Interest, other & tax$201.0M1.8%
- Net income$2.01B17.7%
Where FY2016 revenue went
$11.35B- Cost of revenue: $7.53B, 66% of revenue
- Operating income: $1.81B, 16% of revenue
- SG&A: $1.40B, 12% of revenue
- R&D: $525.0M, 4.6% of revenue
- Other operating costs: $98.0M, 0.9% of revenue
Kept 16% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed November 15, 2016Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $11.35B$12.23B | −7.2% |
| Cost of Revenue | $7.53B$8.15B | −7.6% |
| Gross Profit | $3.83B$4.09B | −6.4% |
| R&D Expenses | $525.00M$540.00M | −2.8% |
| SG&A Expenses | $1.40B$1.50B | −7.2% |
| Operating Income | $1.81B$1.75B | +3.4% |
| Interest Expense | $127.00M$136.00M | −6.6% |
| Net Income | $2.01B$2.42B | −17.0% |
| EPS (Basic) | $5.49$5.98 | −8.2% |
| EPS (Diluted) | $5.44$5.89 | −7.6% |
| Shares Outstanding (Basic) | 366.00M405.00M | −9.6% |
| Shares Outstanding (Diluted) | 369.00M411.00M | −10.2% |
05—Questions
Frequently Asked Questions
What was TE Connectivity's financial performance in fiscal year 2016?
In fiscal year 2016, TE Connectivity reported net sales of $12.238 billion, which were flat compared to the prior year. The company achieved 1.5% organic sales growth, indicating underlying strength in its operations. Net income attributable to TE Connectivity Ltd. was $2.009 billion, or $5.44 per diluted share.
How did the company's different business segments perform?
The Transportation Solutions segment grew by 2.4% in net sales, primarily driven by the automotive market. The Industrial Solutions segment saw a 1.1% increase, boosted by acquisitions and strong performance in industrial equipment. The Communications Solutions segment experienced a 6.8% decline, mainly due to challenges in the data and devices market.
What significant strategic actions did TE Connectivity undertake in fiscal year 2016?
TE Connectivity made significant strategic moves in fiscal year 2016, notably acquiring Creganna Medical, a leader in medical devices, to strengthen its position in the healthcare sector. Additionally, the company divested its Circuit Protection Devices (CPD) business, allowing for a more focused portfolio and resource allocation.
How did the company manage its cash and return capital to shareholders?
The company generated strong cash flow from operations, with net cash provided by continuing operating activities at $2.019 billion, leading to free cash flow of $1.585 billion. TE Connectivity continued its commitment to shareholder returns by paying a total of $1.40 per share in dividends and actively repurchasing its own shares, with $1.1 billion remaining under its authorization at year-end.
06—Continue