Summary
TE Connectivity Ltd. (TEL) reported flat net sales for the second quarter and first six months of fiscal 2013 compared to the prior year. While overall sales remained stable, the company experienced a 4.0% decrease in organic net sales for the quarter and a 4.2% decrease for the first six months, indicating underlying softness in certain end markets. The company noted declines in industrial and infrastructure-based markets, particularly in Industrial Solutions and Network Solutions segments, while consumer-based markets were flat. Positive contributions from the automotive sector within Transportation Solutions and the recent acquisition of Deutsch provided some offset. Significant restructuring charges were incurred in the current period, impacting operating income, as the company continues to streamline its global manufacturing footprint. Despite these charges and some operational headwinds, the company provided an outlook for the third quarter and full fiscal year 2013 with projected net sales and diluted earnings per share. The company also highlighted its strong liquidity position and available capacity under its share repurchase program.
Financial Highlights
55 data points| Revenue | $3.27B |
| Cost of Revenue | $2.21B |
| Gross Profit | $1.05B |
| SG&A Expenses | $438.00M |
| Operating Income | $359.00M |
| Interest Expense | $35.00M |
| Net Income | $277.00M |
| EPS (Basic) | $0.66 |
| EPS (Diluted) | $0.65 |
| Shares Outstanding (Basic) | 420.00M |
| Shares Outstanding (Diluted) | 424.00M |
Key Highlights
- 1Net sales were flat year-over-year for both the second quarter ($3,265 million) and the first six months ($6,399 million) of fiscal 2013.
- 2Organic net sales decreased by 4.0% for the second quarter and 4.2% for the six months, indicating challenges in core business performance.
- 3Significant restructuring charges of $81 million (Q2) and $173 million (YTD) were recorded, impacting operating income.
- 4Operating income for the second quarter was $359 million, down from $385 million in the prior year, impacted by restructuring costs.
- 5The Transportation Solutions segment showed growth, with net sales up 8.7% for the quarter, partly due to the Deutsch acquisition.
- 6Network Solutions and Consumer Solutions segments experienced notable declines in net sales.
- 7The company generated $837 million in net cash from operating activities for the first six months, an increase from the prior year, and $657 million in free cash flow.