TE Connectivity Reports Mixed Q3 FY23 Results, Sees Growth in Transportation and Industrial Segments

TE Connectivity Ltd TEL reported a third-quarter FY23 net sales decline of 2.4% year-on-year to $3.998 billion, missing the consensus of $4.05 billion. Orders grew to $4.0 billion, flat Q/Q.

Revenue from Transportation Solutions rose 5.8% Y/Y to $2.43 billion, Industrial Solutions increased 1.3% Y/Y to $1.14 billion, and Communications Solutions declined by 36.8% Y/Y to $424 million.

Margin: The non-GAAP operating margin contracted 130 basis points to 17.3%.

The non-GAAP EPS of $1.77 beat the consensus of $1.66. TE Connectivity generated $779 million in operating cash flow and held $1.13 billion in cash and equivalents.

"We delivered earnings above guidance, along with year-over-year sales growth in our Transportation and Industrial segments, as we continue to benefit from the strategic positioning of our portfolio around key growth and sustainability trends. Our leading global position in electric vehicles once again allowed us to deliver a strong performance in Transportation, and we continued to capitalize on growth momentum in renewable energy applications as well as ongoing market recovery in commercial air and medical in our Industrial segment," said TE Connectivity CEO Terrence Curtin. 

Outlook: TEL sees Q4 net sales of $4.0 billion, vs. the consensus of $4.09 billion, and non-GAAP EPS of $1.75, vs the consensus of $1.73.

Price Action: TEL shares traded higher by 2.39% at $144.57 on the last check Wednesday.