Does this 8-K change TE Connectivity's previously reported financial results?

No. The company states that the recast segment information has no impact on previously reported consolidated financial statements for any period. It is provided to aid comparability under the new segment structure. The data is unaudited and does not restate previously issued financials.

What are the new segments, and what businesses do they contain?

Transportation Solutions contains the automotive, commercial transportation and sensors businesses. Industrial Solutions contains aerospace, defense and marine; medical; energy; digital data networks (formerly called data and devices); and automation and connected living. The former Communications Solutions businesses now sit within Industrial Solutions.

How did profitability trend on an adjusted basis?

Adjusted operating income rose 11.6% in FY2024 to $2,987 million, and the adjusted margin improved to about 18.9% from about 16.7%. Q4 FY2024 adjusted operating income was $755 million, up 8.0% year over year but slightly lower sequentially. Transportation Solutions carried the higher adjusted margin in Q4 at about 19.4%, versus about 17.4% for Industrial Solutions.

What does the filing say about future guidance or the outlook for fiscal 2025?

The filing contains no revenue, earnings or margin guidance. It only describes the segment reorganization intended to align the organization around the fiscal 2025 strategy. Investors should consult the company's earnings materials and its Form 10-K for the year ended September 27, 2024 for outlook and risk discussion.

Why should investors be cautious about the non-GAAP adjusted operating income figures?

Adjusted operating income excludes restructuring and other charges, acquisition-related charges, goodwill impairment and other items. In FY2024, these adjustments totaled about $191 million, which is a meaningful share of adjusted profit. Management also uses this metric in incentive compensation, so investors should review the GAAP operating income of $2,796 million alongside it and consider whether the recurring nature of restructuring charges is a concern.

TEL 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed December 17, 2024. Cited figures are marked; the original filing is the authoritative source.

TE Connectivity's 8-K, filed December 17, 2024, does not report new earnings or guidance.

It furnishes unaudited recast segment data for the eight quarters from Q1 FY2023 through Q4 FY2024 and the fiscal years FY2023 and FY2024, reflecting a reorganization effective Q1 FY2025. The company now reports two segments: Transportation Solutions (automotive, commercial transportation, sensors) and Industrial Solutions (aerospace/defense/marine, medical, energy, digital data networks, and automation and connected living). Former Communications Solutions businesses moved into Industrial Solutions, and certain product lines moved into Transportation Solutions.

The company states the recast has no effect on previously reported consolidated financial statements. On the recast basis, FY2024 net sales were $15,845 million^a, down 1.2% from $16,034 million in FY2023. Transportation Solutions fell 2.0% to $9,481 million, while Industrial Solutions was flat at $6,364 million.

Adjusted operating income (non-GAAP) rose 11.6% to $2,987 million^b, and the adjusted margin expanded from about 16.7% to about 18.9%. GAAP operating income rose 21.4% to $2,796 million, helped by lower restructuring and acquisition-related charges than the prior year's adjustments of $340 million. Fourth-quarter results show a divergence between segments.

Q4 FY2024 net sales were $4,068 million^c, up 0.8% year over year. Industrial Solutions grew 8.6% to $1,738 million, led by aerospace, defense and marine (up 14.1% for the year) and digital data networks (up 9.6% for the year). Transportation Solutions declined 4.3% in Q4 to $2,330 million, with sensors weaker.

Q4 adjusted operating income rose 8.0% year over year to $755 million^d, but was down about 1.4% sequentially from Q3. Investors should note that automation and connected living fell 15.2% for FY2024, and the segment realignment changes historical comparability.

02—Key points

Key Highlights

FY2024 net sales of $15,845 million declined 1.2% from $16,034 million in FY2023, with Transportation Solutions down 2.0% and Industrial Solutions flat.
FY2024 adjusted operating income (non-GAAP) rose 11.6% to $2,987 million, and the adjusted margin expanded from roughly 16.7% to roughly 18.9%.
GAAP operating income rose 21.4% to $2,796 million, as special charges fell from $340 million in FY2023 to $166 million in FY2024 on a restructuring and other charges basis.
Q4 FY2024 net sales grew 0.8% year over year to $4,068 million, with Industrial Solutions up 8.6% and Transportation Solutions down 4.3%.
Within Industrial Solutions, aerospace, defense and marine grew 14.1% and digital data networks grew 9.6% for FY2024, while automation and connected living fell 15.2%.
Transportation Solutions was flat on automotive (about $7.04 billion both years), but sensors fell 11.3% and commercial transportation fell 4.5% for FY2024.
The effective Q1 FY2025 reorganization moved Communications Solutions into Industrial Solutions and consolidated appliances and industrial equipment into automation and connected living, so the recast figures should be used for comparisons.

03—Questions

Frequently Asked Questions

Does this 8-K change TE Connectivity's previously reported financial results?
No. The company states that the recast segment information has no impact on previously reported consolidated financial statements for any period. It is provided to aid comparability under the new segment structure. The data is unaudited and does not restate previously issued financials.
What are the new segments, and what businesses do they contain?
Transportation Solutions contains the automotive, commercial transportation and sensors businesses. Industrial Solutions contains aerospace, defense and marine; medical; energy; digital data networks (formerly called data and devices); and automation and connected living. The former Communications Solutions businesses now sit within Industrial Solutions.
How did profitability trend on an adjusted basis?
Adjusted operating income rose 11.6% in FY2024 to $2,987 million, and the adjusted margin improved to about 18.9% from about 16.7%. Q4 FY2024 adjusted operating income was $755 million, up 8.0% year over year but slightly lower sequentially. Transportation Solutions carried the higher adjusted margin in Q4 at about 19.4%, versus about 17.4% for Industrial Solutions.
What does the filing say about future guidance or the outlook for fiscal 2025?
The filing contains no revenue, earnings or margin guidance. It only describes the segment reorganization intended to align the organization around the fiscal 2025 strategy. Investors should consult the company's earnings materials and its Form 10-K for the year ended September 27, 2024 for outlook and risk discussion.
Why should investors be cautious about the non-GAAP adjusted operating income figures?
Adjusted operating income excludes restructuring and other charges, acquisition-related charges, goodwill impairment and other items. In FY2024, these adjustments totaled about $191 million, which is a meaningful share of adjusted profit. Management also uses this metric in incentive compensation, so investors should review the GAAP operating income of $2,796 million alongside it and consider whether the recurring nature of restructuring charges is a concern.

04—Continue

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