TE Connectivity (TEL) Tops Q4 EPS by 32c, Revenues Beat; Offers 1Q21 EPS/Revenue Guidance Above Consensus

TE Connectivity (NYSE: TEL) reported Q4 EPS of $1.16, $0.32 better than the analyst estimate of $0.84. Revenue for the quarter came in at $3.26 billion versus the consensus estimate of $2.87 billion.

Fourth Quarter Highlights

• Net sales were $3.26 billion, up 28% sequentially on a reported basis compared to the 10% increase the company expected. Sales were down 1% on a reported basis and down 4% on an organic basis year over year.
• Growth in all segments sequentially, with Transportation segment up 49%, driven by Auto business.
• GAAP earnings per share (EPS) from continuing operations were $0.69, and adjusted EPS were $1.16.
• Cash flow from continuing operating activities was $719 million and free cash flow was $648 million.

"I am proud of our employees for delivering fourth quarter results well above our expectations, exiting the year with sequential sales growth in all segments. In particular, our Transportation segment was up nearly 50% from last quarter, driven by a recovery in auto production and our continued outperformance versus the market due to our strong position in hybrid and electric vehicle platform technology," said TE Connectivity CEO Terrence Curtin. "Our global manufacturing strategy and acceleration of our cost reduction activities enabled us to meet our commitments to our customers as they continue to navigate the impacts of COVID-19. Our full year results demonstrate strong cash flow generation and our portfolio is well positioned. While the markets remain uncertain, we do expect our first quarter of 2021 to be back to pre-COVID revenue levels and we expect an increase in profitability with year-over-year adjusted margin and EPS growth."

GUIDANCE:

TE Connectivity sees Q1 2021 EPS of $1.25, versus the consensus of $1.05. TE Connectivity sees Q1 2021 revenue of $3.2 billion, versus the consensus of $3.03 billion.

For the first quarter of fiscal 2021, the company expects net sales of approximately $3.2 billion, reflecting an increase of 1% on a reported basis and down 2% on an organic basis year over year. GAAP EPS from continuing operations are expected to be approximately $0.83, with adjusted EPS of approximately $1.25.

The company is not providing full year guidance due to limited visibility of COVID-19 impact on future demand. Information about TE Connectivity's use of non-GAAP financial measures is provided below. For reconciliations of these non-GAAP financial measures, see the attached tables.

For earnings history and earnings-related data on TE Connectivity (TEL) click here.

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