Sales above the midpoint of guidance; Adjusted EPS of $0.84, above the high end of guidance; GAAP EPS of $0.83
TE Connectivity Ltd. (NYSE: TEL) today reported results for the fiscal first quarter ended December 25, 2015.
First Quarter Highlights
- Net sales of $2.83 billion, above the midpoint of guidance; down 7 percent versus the prior year and down 2 percent organically
- Adjusted Earnings Per Share (EPS) were $0.84, above the high end of guidance; down 6 percent versus the prior year and flat in constant currency
- Diluted Earnings Per Share from Continuing Operations (GAAP EPS) were $0.83
- Excluding SubCom, orders were up 3 percent sequentially and the book-to-bill ratio was 1.04
- Free cash flow was $237 million
- Returned $1.4 billion to shareholders through share buybacks and dividends
- Announced the sale of the Circuit Protection Devices (CPD) business for $350 million
- Recognized as a Thomson Reuters 2015 Top 100 Global Innovator for fifth consecutive year
“I am pleased with our first quarter performance with sales in line with guidance and EPS exceeding the high end of guidance,” said TE Connectivity Chairman and CEO Tom Lynch. “Our businesses executed very well despite the uncertain macro-economic environment and continued softness in China and industrial markets. Last year’s acquisitions in Sensors and Medical continued to gain momentum, and we advanced our strategy to focus on harsh environment applications with the announced sale of our Circuit Protection Devices business.
“For the year, we expect continued strength in our Transportation segment to offset weakness in industrial markets and softness in China,” said Lynch. “We anticipate industrial markets to pick up in the second half of fiscal year 2016 as inventory levels stabilize and orders continue to improve. We are reiterating our guidance and expect to deliver adjusted EPS of $4.00 at the midpoint, an increase of 11 percent year over year and 15 percent on a constant currency basis.”
FISCAL FIRST QUARTER RESULTS
The company reported net sales of $2.83 billion, compared to prior year sales of $3.0 billion. Adjusted EPS were $0.84, compared to $0.89 in the prior year. GAAP EPS were $0.83, compared to $1.05 in the prior year. Free cash flow was $237 million for the quarter.
GAAP EPS included $32 million of restructuring and other charges offset by $28 million of income related to tax items.
Total company orders were $2.8 billion, up 3 percent sequentially excluding SubCom. The book-to-bill ratio was 1.04, excluding SubCom.
OUTLOOK
For the fiscal second quarter 2016, the company expects net sales of $2.88 billion to $3.08 billion and adjusted EPS of $0.84 to $0.92. GAAP EPS are expected to be $0.78 to $0.86, including acquisition related charges of $0.01, and restructuring and other charges of $0.05.
For the full year, the company expects net sales of $11.9 billion to $12.7 billion and adjusted EPS of $3.80 to $4.20. GAAP EPS are expected to be $3.66 to $4.06, including acquisition related charges of $0.03, restructuring and other charges of $0.18, and $0.07 of tax-related income. The outlook includes foreign exchange headwinds, reducing sales by $344 million and adjusted EPS by $0.13 year over year, and the impact of a 53rd week.
The outlook includes foreign exchange and commodity rates that are consistent with current levels. Information about TE Connectivity’s use of non-GAAP financial measures is provided below. For a reconciliation of these non-GAAP financial measures, see the attached tables.
CONFERENCE CALL AND WEBCAST
- Internet users will be able to access the company’s earnings webcast, including slide materials, at the “Investors” section of TE Connectivity’s website: http://investors.te.com.
- By telephone: For both “listen-only” participants and those participants who wish to take part in the question-and-answer portion of the call, the dial-in number in the United States is (800) 230-1766, and for international callers, the dial-in number is (612) 332-0107.
- An audio replay of the conference call will be available beginning at 10:30 a.m. ET on January 20, 2016, and ending at 11:59 p.m. ET on January 27, 2016. The dial-in number for participants in the United States is (800) 475-6701. For participants outside the United States, the dial-in number is (320) 365-3844. The replay access code for all callers is 381577.
Click here to view the full release including financial tables.
