TE Connectivity (TEL) Q4 2024 earnings summary

Executive summary

• Delivered Q4 revenue and adjusted EPS ahead of guidance, with Q4 net sales of $4.1B, up 1% reported and 2% organically year-over-year, driven by strong execution and margin improvement across segments.

• Achieved record operating margins, adjusted EPS ($7.56, up 12% year-over-year), and free cash flow ($2.8B, up 17% year-over-year) for fiscal 2024.

• Board authorized a $2.5B increase to the share repurchase program, reinforcing long-term value creation and capital return commitment.

• Communications and Transportation segments delivered organic growth for the year, with strong AI-driven performance.

• Returned $2.8B to shareholders in FY24 via buybacks and dividends, and deployed $340M for bolt-on acquisitions.

Financial highlights

• Q4 sales were $4.1B, up 2% organically year-over-year, exceeding guidance due to strong AI-related sales in Communications.

• Adjusted EPS for Q4 was $1.95, up 10% year-over-year; adjusted operating margin was 18.6%, up 130 bps.

• Full-year sales reached $15.8B; adjusted operating margin expanded 220 bps to 18.9%.

• Record free cash flow of $2.8B in 2024, up 17% from prior year, with 120% conversion to adjusted net income.

• Q4 net sales were $4,068M, operating income $651M, and adjusted operating income $755M.

Outlook and guidance

• Q1 FY25 sales expected at $3.9B, up 2% year-over-year, with adjusted EPS of $1.88 (including $0.04 tax headwind).

• Anticipates acceleration of growth through FY25, with continued investments in engineering and capacity, especially in Asia and AI.

• Expects margin and EPS expansion, and strong free cash flow in FY25.

• Segment reporting to be reorganized into Transportation Solutions and Industrial Solutions in FY25.

• Board authorized a $2.5B increase in share repurchase program.