By Tess Stynes
TE Connectivity Ltd. (TEL) said its earnings rose 71% in the
final quarter of the electronic-component maker's business year on
revenue growth and lower restructuring-related expenses and other
one-time items.
Excluding such items, earnings came in at the high end of
expectations.
The company, which provides electronic connection products for
markets including automotive, energy, broadband and consumer
products, recently completed its $1.4 billion acquisition of
Measurement Specialties, a move that expands its portfolio of
sensor technology.
In the latest quarter, revenue growth at the transportation and
industrial segments offset declines in its network and consumer
segments.
Chairman and Chief Executive Thomas J. Lynch in an interview
reiterated that the subsea market has been weak for the past two
years, but is going into a strong cycle.
Mr. Lynch said that TE Connectivity--which installs about 50% of
undersea cable--has started on three major subsea telecom projects,
which are expected to drive growth in its network segment next
year.
Revenue in the network segment--which includes the undersea
telecom business--fell 3.1% year to year, but improved 5.6% from
the previous quarter.
For the quarter ended Sept. 26, TE Connectivity reported a
profit of $663 million, or $1.60 a share, up from $387 million, or
92 cents a share, a year earlier. Excluding acquisition-related and
restructuring-related charges and other items, earnings rose to
$1.02 from 93 cents. Revenue increased 4.2% to $3.58 billion.
The company had projected per-share earnings of 98 cents to
$1.02 and sales of $3.56 billion to $3.66 billion.
In the latest period, the company's transportation segment
revenue increased 6.9%, again driven by strong growth in the global
automotive industry. Mr. Lynch said that in addition to product
sales increases, TE Connectivity also has continued to bring in
more design wins. The segment is benefiting from the need for
improvements in mileage and emissions, as well as increases in
entertainment systems, safety equipment and monitoring vehicle
functions.
Industrial revenue climbed 10%. Mr. Lynch said growth was again
led by demand in the fast growing commercial aerospace market and
for equipment for the factory floor, which is becoming more
automated and requiring more electronic components.
For the year ending September 2015, the company forecast
per-share earnings of $4.05 to $4.35 and revenue of $14.7 billion
to $15.3 billion. Analysts polled by Thomson Reuters expected
per-share profit of $4.19 and revenue of $14.86 billion.
For the recently started quarter, TE Connectivity forecast
per-share earnings of 88 cents to 92 and net sales of $3.46 billion
to $3.56 billion. Analysts expected per-share profit of 94 cents
and revenue of $3.52 billion.
Write to Tess Stynes at tess.stynes@wsj.com
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