Q2 2025 TE Connectivity PLC Earnings Call Transcript
Key Points
- TE Connectivity PLC (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 (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.
- 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.
Everyone, thank you for standing by and welcome to the TE Connectivity second-quarter earnings call for fiscal year 2025.
(Operator Instructions)
As a reminder, today's call is being recorded.
I would now like to turn the conference over to our host, Vice President of Investor Relations, Sujal Shah. Please go ahead.
Good morning and thank you for joining our conference call to discuss TE Connectivity's second quarter results and our outlook for our third quarter of fiscal 2025.
With me today are Chief Executive Officer, Terrence Curtin; and Chief Financial Officer, Heath Mitts.
During this call, we will be providing certain forward-looking information, and we ask you to review the forward-looking cautionary statements included in today's press release. In addition, we will use certain non-GAAP measures in our discussion this morning.
We ask you to review the sections of our press release and the accompanying slide presentation that
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