Q3 2025 TE Connectivity PLC Earnings Call Transcript
Key Points
- TE Connectivity PLC (TEL) reported double-digit increases in both sales and adjusted earnings per share, with sales growing 14% and adjusted EPS growing 19%, both setting quarterly records.
- The company achieved record adjusted operating margins of 20% and generated $1 billion in free cash flow, highlighting strong operational performance.
- The Industrial segment saw over 20% organic growth, driven by digital data networks and energy businesses, with adjusted operating margins expanding nearly 400 basis points year-over-year.
- TE Connectivity PLC (TEL) is benefiting from strong demand in artificial intelligence and energy applications, with AI-related revenues expected to exceed $800 million in fiscal 2025.
- The company returned $1.5 billion to shareholders and deployed $2.6 billion for acquisitions, including the Richards acquisition, which strengthens its position in the North American utility market.
- The global auto market remains uneven, with strength in Asia offset by declines in Europe and North America, impacting the Transportation segment's performance.
- The Sensors business experienced weakness in Western regions, partially offset by growth in Asia, indicating regional disparities in demand.
- TE Connectivity PLC (TEL) faces ongoing challenges with tariffs, impacting approximately 1.5% of sales, although the company has managed to mitigate earnings impact.
- The commercial transportation business saw declines in North America, despite growth in Asia and Europe, reflecting regional market challenges.
- The company's growth over market in the automotive segment is pressured by uneven production levels, particularly in Western regions, affecting overall content growth.
Everyone, thank you for standing by, and welcome to the TE Connectivity third 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 third quarter results and outlook for our fourth 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, and we ask you to review the sections of our press release and the accompanying slide presentation that address the use of these items.
The press release
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