Summary
TE Connectivity plc (TEL) reported its first quarter fiscal year 2018 results, showcasing a significant 13.6% increase in net sales to $3.48 billion compared to the prior year's quarter. This growth was primarily driven by strong performance in the Transportation Solutions and Industrial Solutions segments, bolstered by organic growth and favorable foreign currency exchange rates. While overall revenue grew robustly, the company experienced a net loss of $40 million, a sharp contrast to the $409 million net income in the same quarter last year. This shift is largely attributable to a substantial $567 million income tax expense related to the U.S. Tax Cuts and Jobs Act enacted in December 2017, which required the revaluation of U.S. deferred tax assets and liabilities. Despite the quarterly loss, the company provided a positive outlook for the second quarter and full fiscal year 2018, projecting continued sales growth across its key segments. Management highlights increased content per vehicle in the automotive sector and growth in industrial equipment as key drivers. The company also continued its capital return initiatives, repurchasing shares and paying dividends, underscoring a focus on shareholder value despite the significant, one-time tax-related charge impacting the current quarter's profitability.
Financial Highlights
52 data points| Revenue | $3.34B |
| Cost of Revenue | $2.17B |
| Gross Profit | $1.16B |
| SG&A Expenses | $377.00M |
| Operating Income | $586.00M |
| Interest Expense | $26.00M |
| Net Income | -$40.00M |
| EPS (Basic) | $-0.11 |
| EPS (Diluted) | $-0.11 |
| Shares Outstanding (Basic) | 352.00M |
| Shares Outstanding (Diluted) | 352.00M |
Key Highlights
- 1Net sales increased by 13.6% year-over-year to $3.48 billion, driven by strong performance in Transportation Solutions (+21.3%) and Industrial Solutions (+10.9%).
- 2A net loss of $40 million was reported for the quarter, primarily due to a $567 million income tax expense related to the U.S. Tax Cuts and Jobs Act.
- 3Organic net sales, excluding currency impacts and acquisitions, grew by 7.9%, indicating underlying business strength.
- 4The company provided a positive outlook, expecting net sales between $3.55 billion and $3.65 billion for Q2 FY18 and between $14.1 billion and $14.3 billion for full-year FY18.
- 5Operating income increased by 17.4% to $581 million, reflecting improved operational efficiency across segments.
- 6The company returned capital to shareholders through $141 million in dividend payments and $214 million in share repurchases during the quarter.
- 7Inventories increased by 9.6% to $1.98 billion, while accounts receivable also saw a slight increase.