TE Connectivity announces second quarter financial results for fiscal year 2024

Significant margin expansion drove year-over-year EPS growth; cash flow hit a record high

SCHAFFHAUSEN, Switzerland – April 26, 2024 – TE Connectivity (TE) today announced its second quarter financial results for fiscal year 2024 ending March 29, 2024.

Second quarter highlights

• Net sales were $3.97 billion, in line with guidance, down 5% year-over-year and down 3% on an organic basis. Sales increased 4% sequentially and up 3% on an organic basis.

  
  

• GAAP diluted earnings per share from continuing operations were $1.75. Adjusted earnings per share were $1.86, beating expectations and up 13% year-over-year.

  
  

• Orders were $4.0 billion, up 6% sequentially, with all solutions increasing sequentially.

• Operating margin was 17.4%, and adjusted operating margin was 18.5%, up 250 basis points year-over-year, driven by strong operating performance.

  
  

• Cash flow was strong in the first half of the fiscal year, reaching a record high.

1. Cash flow from operating activities was $1.4 billion, up 18% year-over-year.

2. Free cash flow was US$1.1 billion, a year-on-year increase of 32%.

• More than $1.5 billion has been deployed so far this fiscal year, of which approximately $1.2 billion has been returned to shareholders and approximately $350 million has been used to supplement the Schaffner acquisition.

• TE's "Connecting Our World" annual corporate responsibility report shows that over the past three years, "scope 1" and "scope 2" greenhouse gas emissions have been reduced by 72%; and a "scope 3" greenhouse gas emission reduction target has been set that meets the standards of the "Science-Based Targets Initiative (SBTi)".

Terrence Curtin, CEO of TE Connectivity , said: "This quarter, the TE team delivered higher-than-expected EPS and double-digit revenue growth in a dynamic market environment, driven by margin improvements across our three solutions. I am pleased that TE's order intake increased sequentially across all solutions. TE's first-half free cash flow was strong, up 32% year-over-year, a company record, driven by our cash generation model. Based on this quarter's performance, we expect strong revenue growth and margin improvement in the third quarter and full fiscal year. We will continue to invest in key trends including hybrid and electric vehicles, renewable energy and artificial intelligence. Our global position and industry-leading innovation in these areas are enabling our customers' technology development and driving our own long-term profitable growth."

Outlook for the third quarter of fiscal year 2024

For the third quarter of fiscal 2024, the company expects net sales of approximately $4 billion. GAAP earnings per share from continuing operations are expected to be approximately $1.71, up 2% year-over-year; adjusted earnings per share are expected to be approximately $1.85, up 5% year-over-year. The third quarter earnings guidance (earnings per share) is impacted by $0.15 of tax and foreign exchange rate fluctuations.