Summary
TE Connectivity plc (TEL) reported net sales of $3.41 billion for the second quarter of fiscal year 2019, a decrease of 4.2% compared to the prior year's quarter. This decline was primarily driven by weaker performance in the Transportation Solutions segment, particularly in the automotive market, and a moderate decrease in Communications Solutions. However, the Industrial Solutions segment showed positive growth. For the first six months of fiscal 2019, net sales decreased by 2.0% to $6.76 billion. Operating income for the quarter declined by 14.6% year-over-year to $530 million, reflecting the lower sales and increased restructuring charges. The company's diluted earnings per share from continuing operations were $1.26 for the quarter, down from $1.38 in the prior year. The divestiture of the Subsea Communications (SubCom) business contributed $10 million in net income for the quarter, though a significant pre-tax loss on sale was incurred. Management has provided an outlook for the third quarter and full fiscal year 2019, expecting continued sales declines in certain segments and an overall revenue range of $13.55 billion to $13.75 billion for the full year.
Financial Highlights
52 data points| Revenue | $3.41B |
| Cost of Revenue | $2.29B |
| Gross Profit | $1.12B |
| SG&A Expenses | $373.00M |
| Operating Income | $530.00M |
| Interest Expense | $15.00M |
| Net Income | $439.00M |
| EPS (Basic) | $1.30 |
| EPS (Diluted) | $1.29 |
| Shares Outstanding (Basic) | 338.00M |
| Shares Outstanding (Diluted) | 340.00M |
Key Highlights
- 1Net sales decreased by 4.2% to $3.41 billion in Q2 FY19 compared to Q2 FY18, with Transportation Solutions being the main driver of the decline.
- 2The Industrial Solutions segment showed resilience, with net sales increasing by 3.6% in Q2 FY19 year-over-year.
- 3Operating income fell 14.6% to $530 million in Q2 FY19, impacted by lower sales and increased restructuring charges.
- 4Diluted EPS from continuing operations decreased to $1.26 in Q2 FY19 from $1.38 in Q2 FY18.
- 5The company completed the sale of its Subsea Communications (SubCom) business during the first six months of fiscal 2019, impacting reported results.
- 6Restructuring charges increased significantly, reaching $42 million in Q2 FY19 compared to $6 million in Q2 FY18, signaling ongoing cost-reduction initiatives.
- 7The company is managing its liquidity well, with net cash provided by continuing operating activities at $883 million for the first six months of fiscal 2019.