TE Connectivity Ltd. Earnings Cheat Sheet: Revenue Strengthens Again by Double-Digits

TE Connectivity Ltd. (NYSE:TEL) reported higher profit for the fourth quarter as revenue showed growth. TE Connectivity is a provider of engineered electronic components, network solutions, specialty products and communication systems.

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TE Connectivity Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the diversified electronics company rose to $326 million (75 cents per share) vs. $297 million (66 cents per share) in the same quarter a year earlier. This marks a rise of 9.8% from the year earlier quarter.

Revenue: Rose 24.7% to $3.91 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: TEL reported adjusted net income of 81 cents per share. By that measure, the company fell short of mean estimate of 85 cents per share. Analysts were expecting revenue of $3.93 billion.

Quoting Management: “We are very pleased with the strong performance in 2011 as our team executed well in a volatile environment. We continued to strengthen the company’s position in our Automotive and Telecom Networks businesses as well as in high-growth emerging markets,” said TE Connectivity Chief Executive Officer Tom Lynch. “Our increased investment in engineering in recent years and the acquisition of ADC have served us well and expanded the range of products and solutions we provide for our customers.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 18%, with the biggest boost coming in the most recent quarter when revenue rose 24.7% from the year earlier quarter.

Gross margin shrank 0.2 percentage point to 31.5%. The contraction appeared to be driven by increased costs, which rose 25% from the year earlier quarter while revenue rose 24.7%.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 78 cents versus a mean estimate of net income of 71 cents per share.

Net income has increased 57.8% year over year on average across the last five quarters. The biggest gain came in the fourth quarter of the last fiscal year, when income climbed more than threefold from the year earlier quarter.

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 81 cents a share to 77 cents over the last ninety days. At $3.08 per share, the average estimate for the fiscal year has risen from $3.06 sixty days ago.

Competitors to Watch: Tyco International (NYSE:TYC), Molex Incorporated (NASDAQ:MOLX), Amphenol Corporation (NYSE:APH), Thomas & Betts Corporation (NYSE:TNB), AVX Corporation (NYSE:AVX), Spectrum Control, Inc. (NASDAQ:SPEC), Methode Electronics Inc. (NYSE:MEI), Littelfuse, Inc. (NASDAQ:LFUS), Corning Incorporated (NYSE:GLW), and Cablitec Holding AG (NYSE:GNI).

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(Source: Xignite Financials)