TE Connectivity Earnings: The Streak is Broken

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Falling revenue did not prevent TE Connectivity Ltd. (NYSE:TEL) from reporting a profit boost in the fourth quarter. TE Connectivity is a provider of engineered electronic components, network solutions, specialty products and communication systems.

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TE Connectivity Ltd. Earnings Cheat Sheet

Results: Net income for TE Connectivity Ltd. rose to $396 million (95 cents per share) vs. $326 million (75 cents per share) in the same quarter a year earlier. This marks a rise of 21.5% from the year-earlier quarter.

Revenue: Fell 10.4% to $3.36 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: TE Connectivity Ltd. reported adjusted net income of 76 cents per share. By that measure, the company beat the mean estimate of 74 cents per share. It fell short of the average revenue estimate of $3.56 billion.

Quoting Management: “We had a solid fourth quarter with sales and EPS in line with our guidance despite an increasingly uncertain economic environment,” said TE Connectivity Chief Executive Officer Tom Lynch. “We delivered another strong year of free cash flow and resumed our share repurchase program in the fourth quarter. During the year, we continued to strengthen and focus the Company with the acquisition of Deutsch and the divestitures of Touch and Professional Services.”

Key Stats:

Last quarter’s profit increase breaks a three-quarter run of year-over-year profit decreases. In the third quarter, net income fell 43.9% from the year earlier, while the figure dropped 14% in the second quarter and 1.9% in the first quarter.

The company beat estimates last quarter after meeting expectations in the third quarter with net income of 79 cents per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from 77 cents a share to 75 cents over the last ninety days. The average estimate for the fiscal year has remained at $2.84 per share.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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