Summary
TE Connectivity Ltd. reported a decrease in net sales for the third quarter and first nine months of fiscal 2019 compared to the prior year, with sales declining in the Transportation Solutions and Communications Solutions segments, partially offset by growth in Industrial Solutions. Despite lower sales, the company maintained a strong gross margin and demonstrated effective cost control, leading to a slight decrease in operating income. The company highlighted progress in its restructuring initiatives and continued to return capital to shareholders through dividends and share repurchases. The sale of the Subsea Communications (SubCom) business was completed during the period, impacting reported results. Looking ahead, TE Connectivity anticipates continued sales pressure in the fourth quarter of fiscal 2019, particularly in the automotive sector due to market weakness in China and EMEA. The company expects full-year fiscal 2019 sales to be between $13.35 billion and $13.45 billion. Management remains focused on managing costs, capital resources, and navigating the evolving macroeconomic environment. The company also noted a significant income tax benefit related to Swiss Tax Reform, which will be followed by a significant tax expense upon cantonal implementation.
Financial Highlights
52 data points| Revenue | $3.39B |
| Cost of Revenue | $2.28B |
| Gross Profit | $1.11B |
| SG&A Expenses | $356.00M |
| Operating Income | $520.00M |
| Interest Expense | $13.00M |
| Net Income | $757.00M |
| EPS (Basic) | $2.25 |
| EPS (Diluted) | $2.23 |
| Shares Outstanding (Basic) | 337.00M |
| Shares Outstanding (Diluted) | 339.00M |
Key Highlights
- 1Net sales decreased by 5.4% in Q3 2019 and 3.2% for the first nine months of fiscal 2019 compared to the prior year, with declines in Transportation and Communications Solutions, while Industrial Solutions saw growth.
- 2Gross margin remained robust at 32.8% for the quarter and 32.9% for the nine months, though slightly down from the prior year due to lower volume, unfavorable product mix, and foreign currency impacts.
- 3Selling, general, and administrative expenses were reduced by 9.6% in Q3 and 5.3% for the nine months, reflecting successful cost control measures and restructuring savings.
- 4Operating income saw a decrease of 6.1% for the quarter and 12.9% for the nine months, reflecting lower sales and higher restructuring charges.
- 5The company completed the sale of its Subsea Communications (SubCom) business during the nine-month period, generating cash proceeds of $297 million.
- 6TE Connectivity returned capital to shareholders through $454 million in dividends and $836 million in share repurchases during the first nine months of fiscal 2019.
- 7The company provided an outlook for Q4 fiscal 2019 with expected net sales between $3.2 billion and $3.3 billion and adjusted full-year 2019 net sales to $13.35-$13.45 billion.