Adjusted EPS of $0.90, above the mid-point of guidance; GAAP EPS of $1.06
TE Connectivity Ltd. (NYSE: TEL) today reported results for the fiscal second quarter ended March 25, 2016.
Second Quarter Highlights
- Net sales of $2.95 billion
- Adjusted Earnings Per Share (EPS) were $0.90, above the mid-point of guidance
- Diluted Earnings Per Share from Continuing Operations (GAAP EPS) were $1.06
- Free cash flow was $165 million
- Returned $1.2 billion to shareholders through share buybacks and dividends
- Completed the acquisition of Creganna Medical Group (closed April 4, 2016), and the sale of the Circuit Protection business
- Named a 2016 World’s Most Ethical Company by Ethisphere Institute
“I am pleased we exceeded the midpoint of our adjusted EPS guidance range. The company continues to execute well in a sluggish global economic environment,” said TE Connectivity Chairman and CEO Tom Lynch. “Organic growth in our Transportation Solutions segment and SubCom business was offset by continued weakness in industrial-related markets.
“We strengthened our harsh environment portfolio with the acquisition of Creganna and the sale of the Circuit Protection business. The Creganna acquisition doubles our medical business to about $500 million in revenue and establishes TE as a leader in the high-growth minimally invasive medical device market.
“For the full year, we are reiterating our adjusted EPS guidance of $4.00 at the midpoint, an increase of 11 percent over the prior year. This outlook reflects a return to sales growth in the second half of the fiscal year and continued benefits from our strong operating model.”
FISCAL SECOND QUARTER RESULTS
The company reported net sales of $2.95 billion, compared to prior year sales of $3.08 billion. Adjusted EPS were $0.90, compared to $0.91 in the prior year. GAAP EPS were $1.06, compared to $0.77 in the prior year. Free cash flow was $165 million for the quarter.
GAAP EPS included $64 million of income from net restructuring and other charges (credits) partially offset by $6 million of expense from acquisition related charges and tax items.
Total company orders were $2.7 billion, up 1 percent sequentially, excluding SubCom. The book-to-bill ratio was 1.00, excluding SubCom.
OUTLOOK
For the fiscal third quarter 2016, the company expects net sales of $3.0 billion to $3.2 billion and adjusted EPS of $1.00 to $1.06. GAAP EPS are expected to be $0.90 to $0.96, including acquisition related charges of $0.03, and restructuring and other charges of $0.07.
For the full year, the company expects net sales of $12.1 billion to $12.5 billion and adjusted EPS of $3.90 to $4.10. GAAP EPS are expected to be $3.92 to $4.12, including acquisition related charges of $0.06, net restructuring and other credits of $0.01, and tax-related income of $0.07. The outlook includes the Creganna acquisition, reduced impact from foreign exchange headwinds and the impact of a 53rd week.
The outlook assumes 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.
OTHER ITEMS
Earlier today, the company announced the acquisition of Jaquet Technology Group AG (JAQUET), a sensor company with speed sensing products for the automotive and industrial markets. The transaction is subject to obtaining the necessary regulatory approvals and is expected to close later in the company’s fiscal year. Learn more at http://www.te.com/usa-en/products/sensors.html
Click here to view the full release including financial tables.
