TE Connectivity Ltd. Earnings: Double-Digit Revenue Growth Continues

TE Connectivity Ltd. (NYSE:TEL) reported net income above Wall Street’s expectations for the most recent quarter. TE Connectivity Ltd. is a provider of engineered electronic components, network solutions, specialty products, and subsea communication systems.

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TE Connectivity Earnings Cheat Sheet for the Third Quarter

Results: Net income for TE Connectivity Ltd. rose to $355 million (80 cents per share) vs. $330 million (72 cents per share) in the same quarter a year earlier. This marks a rise of 7.6% from the year earlier quarter.

Revenue: Rose 20.9% to $3.73 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: TEL reported adjusted net income of 78 cents per share. By that measure, the company beat the mean estimate of 71 cents per share. It beat the average revenue estimate of $3.56 billion.

Quoting Management: “Our third quarter results were strong and our earnings represent a new high for TE. We continue to capitalize on automotive sales growth and investment in broadband networks, particularly outside of the United States. These trends more than offset the impact on our company from the Japan earthquake,” said TE Connectivity Chief Executive Officer Tom Lynch. “Although there is macroeconomic uncertainty, we expect our momentum to continue through the fourth quarter and to deliver full year adjusted earnings per share in excess of $3.00, up about 20 percent from last year.”

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 17.6%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 23% from the year earlier quarter.

Gross margin shrank 1.8 percentage points to 30.2%. The contraction appeared to be driven by increased costs, which rose 24.1% from the year earlier quarter while revenue rose 20.9%.

The company topped expectations last quarter after falling short of forecasts in the second quarter with net income of 71 cents versus a mean estimate of net income of 72 cents per share.

Competitors to Watch: 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)