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TE Connectivity TEL reported second-quarter fiscal 2025 adjusted earnings of $2.10 per share, which beat the Zacks Consensus Estimate by 7.14% and increased 12.9% from the year-ago quarter.
Net sales totaled $4.1 billion, which surpassed the consensus estimate by 4.66% and increased 4% year over year. Sales were favorably impacted by growth in the Industrial segment.
Orders of $4.25 billion increased 6% both year over year and sequentially.
The Transportation solutions segment generated revenues of $2.31 billion, contributing 55.9% to net sales. The figure declined 3.9% year over year on a reported basis and 2% organically.
TE Connectivity Ltd. price-consensus-chart | TE Connectivity Ltd. Quote
The company witnessed a 2% decline year over year in automotive sales. Organically, auto sales remained flat.
Sensor sales declined 12% year over year, while commercial transportation sales dropped 7%. The decrease was primarily due to weakness in broader industrial end markets across Europe and North America.
The Industrial Solutions segment generated revenues $1.83 billion, making up 44.1% of net sales. This represented a 17% increase year over year on a reported basis and 16% organically.
Digital Data Networks, Automation & Connected Living, Aerospace, Defense and Marine, and Energysaw grew 77%, 2%, 9%, and 19% year over year, respectively. However, Medical experienced a decline of 14%.
In the second quarter of fiscal 2025, GAAP gross margin expanded 90 basis points (bps) year over year to 35.2%.
Selling, general and administrative expenses, as a percentage of revenues, decreased 20 bps year over year to 11%.
Research, development and engineering expenses, as a percentage of revenues, expanded 30 bps to 4.9%.
Adjusted operating margin expanded 60 bps year over year to 18.1% in the reported quarter.
As of March 28, 2025, cash and cash equivalents were $2.55 billion, up from $1.25 billion as of Dec. 27, 2024.
Long-term debt was $3.26 billion as of March 28, 2025, compared with $3.29 billion as of Dec. 27, 2024.
TE Connectivity generated $0.7 billion in cash from operations in the reported quarter, down from the previous quarter’s $0.9 billion.
TEL generated a free cash flow of $424 million in the second quarter, down from $674 million reported in the previous quarter.
TEL offered positive guidance for the third quarter of fiscal 2025, citing benefits from the Richards acquisition. TE Connectivity expects fiscal third-quarter net sales to increase 8% year over year to $4.3 billion. Adjusted earnings are projected to be $2.06 per share, indicating growth of 8% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
The Zacks Consensus Estimate for third-quarter fiscal 2025 is pegged at $4.13 billion, suggesting 3.92% growth over the figure reported in the year-ago quarter. The consensus mark for earnings is pegged at 2 cents per share, down by a penny, indicating 4.71% growth from the figure reported in the year-ago quarter.
Currently, TE Connectivity has a Zacks Rank #3 (Hold).
StoneCo STNE, Baidu BIDU and Qorvo QRVO are some better-ranked stocks that investors can consider in the broader sector. While StoneCo sports a Zacks Rank #1 (Strong Buy), Baidu and Qorvo carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
StoneCo shares have appreciated 64.6% year to date. STNE is set to report its first-quarter 2025 results on May 8.
Baidu shares are up 0.9% year to date. BIDU is slated to report its first-quarter 2025 results on May 21.
Qorvo shares have declined 15.4%, year to date. QRVO is scheduled to report its fourth-quarter fiscal 2025 results on April 29.
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This article originally published on Zacks Investment Research (zacks.com).
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