Summary
TE Connectivity plc (TEL) reported its financial results for the quarter and six months ended March 24, 2016. Net sales for the quarter decreased by 4.2% year-over-year to $2.95 billion, primarily driven by declines in the Industrial Solutions and Communications Solutions segments, partly offset by growth in Transportation Solutions. The company experienced organic net sales growth in Transportation Solutions but saw declines in the other two segments. Profitability saw a significant boost from a $146 million pre-tax gain on the sale of the Circuit Protection Devices (CPD) business. Restructuring activities contributed to a net credit of $99 million in the quarter. Despite lower sales, operating income increased year-over-year to $535 million due to these positive factors. Diluted earnings per share (EPS) for the quarter was $1.03, a decrease from $1.45 in the prior year's comparable period, influenced by factors including discontinued operations and changes in tax items. The company also announced the acquisition of Creganna Medical group for approximately $900 million subsequent to the quarter end, expected to be accretive to earnings. Management provided an outlook for the third quarter and full fiscal year 2016, projecting net sales between $3.0 billion and $3.2 billion for Q3 and $12.1 billion to $12.5 billion for the full year.
Financial Highlights
55 data points| Revenue | $2.95B |
| Cost of Revenue | $1.99B |
| Gross Profit | $962.00M |
| SG&A Expenses | $367.00M |
| Operating Income | $535.00M |
| Interest Expense | $32.00M |
| Net Income | $380.00M |
| EPS (Basic) | $1.04 |
| EPS (Diluted) | $1.03 |
| Shares Outstanding (Basic) | 364.00M |
| Shares Outstanding (Diluted) | 368.00M |
Key Highlights
- 1Net sales decreased 4.2% to $2.95 billion in Q2 Fiscal Year 2016 compared to Q2 Fiscal Year 2015, impacted by foreign currency translation and organic declines in Industrial and Communications Solutions segments.
- 2Transportation Solutions segment showed resilience with organic net sales increasing by 3.2% in Q2 FY16, driven by the automotive and sensors end markets.
- 3A significant pre-tax gain of $146 million was recognized from the divestiture of the Circuit Protection Devices (CPD) business, positively impacting operating income.
- 4Operating income increased by 19.4% to $535 million in Q2 FY16, driven by the gain on divestiture and net restructuring credits, despite lower net sales.
- 5Diluted earnings per share (EPS) for Q2 FY16 were $1.03, down from $1.45 in the prior year's quarter, partly due to discontinued operations and tax-related items.
- 6The company completed the acquisition of Creganna Medical group for approximately $900 million after the quarter ended, which is expected to contribute to the Industrial Solutions segment.
- 7Free cash flow increased to $402 million for the first six months of fiscal 2016 compared to $296 million in the prior year period.