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• Revenue: $4.1 billion, up 5% organically and 4% on a reported basis year over year.

• Adjusted Earnings Per Share (EPS): $2.10, up 13% versus the prior year.

• Adjusted Operating Margin: 19.4%, up 90 basis points year over year.

• Orders: $4.25 billion, up 6% year over year and sequentially.

• Free Cash Flow: $1.1 billion in the first half of the fiscal year.

• Dividend Increase: 9% increase announced.

• Industrial Segment Growth: 17% growth, driven by digital data networks and AI applications.

• Transportation Segment Margin: Adjusted operating margins above 20%.

• Richards Acquisition: $2.3 billion deployed for acquisition in the industrial segment.

• Third Quarter Sales Guidance: Expected to increase to $4.3 billion, up 5% organically year over year.

• Third Quarter Adjusted EPS Guidance: Expected to be around $2.06, up 8% year over year.

• Warning! GuruFocus has detected 3 Warning Sign with PRG.

Release Date: April 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• TE Connectivity PLC (NYSE:TEL) reported second-quarter sales of $4.1 billion, exceeding guidance and reflecting a 5% organic growth year over year.

• The company achieved record adjusted earnings per share of $2.10, surpassing guidance and marking a 13% increase from the previous year.

• Adjusted operating margins improved to 19.4%, up 90 basis points year over year, driven by strong operational performance.

• The industrial solutions segment experienced double-digit growth, with a notable 17% increase, driven by digital data networks and AI applications.

• TE Connectivity PLC (NYSE:TEL) demonstrated strong cash generation, with $1.1 billion in free cash flow in the first half of the year and a 9% dividend increase announced.

Negative Points

• The company faces challenges from recent tariff announcements, particularly impacting the industrial segment more than the transportation segment.

• Global auto production is expected to decline, with a 5% year-over-year decrease anticipated, affecting the transportation segment.

• The commercial transportation business experienced a 5% organic decline due to market weakness in Europe and North America.

• The medical business saw a 14% decline in sales due to inventory normalization by customers, although sequential growth was noted.

• The adjusted effective tax rate is expected to increase, resulting in a $0.06 sequential headwind to EPS in the third quarter.

Q & A Highlights

Q: How are tariffs impacting TE Connectivity, and what are the geopolitical challenges for a US company like TE? A: Terrence Curtin, CEO, explained that the tariff impact is more significant in the industrial segment than in transportation due to global scale and regional manufacturing. TE's business model is highly localized, which mitigates anti-American sentiment. The company works closely with local teams and customers to navigate geopolitical challenges, emphasizing its global nature and local presence.