TE Connectivity (TEL) Tops Q2 EPS by 6c, Beats on Revenues; Offers FY18 EPS/Revenue Outlook Above Consensus

TE Connectivity (NYSE: TEL) reported Q2 EPS of $1.42, $0.06 better than the analyst estimate of $1.36. Revenue for the quarter came in at $3.7 billion versus the consensus estimate of $3.6 billion.

Second Quarter Highlights

• Net sales were $3.7 billion, up 16 percent, as reported, and 7 percent, organically, over the second quarter of 2017
• Diluted earnings per share (EPS) from continuing operations were $1.39, up 23 percent from the second quarter of 2017, and adjusted EPS were $1.42, growth of 19 percent over the same period in 2017
• Cash flow from continuing operating activities was $377 million and free cash flow was $234 million, with $309 million returned to shareholders
• Orders, excluding the company\'s SubCom business, were $3.7 billion in the quarter, up 6 percent organically from the second quarter of 2017

2018 Outlook

For the fiscal third quarter of 2018, the company expects net sales of $3.65 billion to $3.7 billion, reflecting an increase of 9 percent on an actual basis and 5 percent on an organic basis year-over-year at the mid-point. Diluted EPS from continuing operations are expected to be $1.13 to $1.15, including net restructuring and acquisition-related charges of $0.22. The company expects adjusted EPS of $1.35 to $1.37 which represents a 10 percent improvement at the mid-point versus the third quarter of 2017.

For the full year, the company expects net sales of $14.5 to $14.7 billion, reflecting 11 percent actual and 6 percent organic growth at the mid-point versus the prior year. Diluted EPS from continuing operations are expected to be $3.70 to $3.76, including net restructuring, acquisition-related and other charges of $0.40, and a tax-related charge of $1.42. The company expects adjusted EPS of $5.52 to $5.58, reflecting 15 percent growth at the mid-point compared to fiscal year 2017.

GUIDANCE:

TE Connectivity sees FY2018 EPS of $5.52-$5.58, versus the consensus of $5.51. TE Connectivity sees FY2018 revenue of $14.5-14.7 billion, versus the consensus of $14.33 billion.

For earnings history and earnings-related data on TE Connectivity (TEL) click here.

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