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TE Connectivity (NYSE:TEL) Operating Income

: $2,782 Mil (TTM As of Dec. 2023)
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TE Connectivity's Operating Income for the three months ended in Dec. 2023 was $727 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 was $2,782 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. TE Connectivity's Operating Income for the three months ended in Dec. 2023 was $727 Mil. TE Connectivity's Revenue for the three months ended in Dec. 2023 was $3,831 Mil. Therefore, TE Connectivity's Operating Margin % for the quarter that ended in Dec. 2023 was 18.98%.

Good Sign:

TE Connectivity Ltd operating margin is expanding. Margin expansion is usually a good sign.

TE Connectivity's 5-Year average Growth Rate for Operating Margin % was 0.50% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. TE Connectivity's annualized ROC % for the quarter that ended in Dec. 2023 was 41.92%. TE Connectivity's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 was 43.96%.


TE Connectivity Operating Income Historical Data

The historical data trend for TE Connectivity's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

TE Connectivity Annual Data
Trend Sep14 Sep15 Sep16 Sep17 Sep18 Sep19 Sep20 Sep21 Sep22 Sep23
Operating Income
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2,260.00 1,730.00 2,698.00 2,942.00 2,677.00

TE Connectivity Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Operating Income Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 622.00 664.00 692.00 699.00 727.00

TE Connectivity Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Dec. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $2,782 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


TE Connectivity  (NYSE:TEL) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

TE Connectivity's annualized ROC % for the quarter that ended in Dec. 2023 is calculated as:

ROC % (Q: Dec. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Sep. 2023 ) + Invested Capital (Q: Dec. 2023 ))/ count )
=2908 * ( 1 - -158.08% )/( (17304 + 18503)/ 2 )
=7504.9664/17903.5
=41.92 %

where

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

2. Joel Greenblatt's definition of Return on Capital:

TE Connectivity's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2023 is calculated as:

ROC (Joel Greenblatt) %(Q: Dec. 2023 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Sep. 2023  Q: Dec. 2023
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/ count )
=2868/( ( (3754 + max(2568, 0)) + (3854 + max(2873, 0)) )/ 2 )
=2868/( ( 6322 + 6727 )/ 2 )
=2868/6524.5
=43.96 %

where Working Capital is:

Working Capital(Q: Sep. 2023 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(2967 + 2552 + 712) - (2747 + 74 + 842)
=2568

Working Capital(Q: Dec. 2023 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(2828 + 2783 + 660) - (3398 + 0 + 0)
=2873

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.

3. Operating Income is also linked to Operating Margin %:

TE Connectivity's Operating Margin % for the quarter that ended in Dec. 2023 is calculated as:

Operating Margin %=Operating Income (Q: Dec. 2023 )/Revenue (Q: Dec. 2023 )
=727/3831
=18.98 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.


Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.


TE Connectivity Operating Income Related Terms

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TE Connectivity (NYSE:TEL) Business Description

Traded in Other Exchanges
N/A
Address
Muhlenstrasse 26, Schaffhausen, CHE, CH-8200
TE Connectivity is the largest electrical connector supplier in the world, supplying interconnect and sensor solutions to the transportation, industrial, and communications markets. With operations in 150 countries and over 500,000 stock-keeping units, TE has a broad portfolio that forms the electrical architecture of its end customers' cutting-edge innovations.
Executives
Terrence R Curtin director, officer: EVP & Chief Financial Officer C/O TYCO ELECTRONICS LTD., 1050 WESTLAKES DRIVE, BERWYN PA 19312
John S Jenkins officer: EVP & General Counsel 1050 WESTLAKES DRIVE, BERWYN PA 19312
Heath A Mitts officer: EVP & Chief Financial Officer 1925 WEST FIELD COURT, SUITE 200, LAKE FOREST IL 60045
Malavika Sagar officer: SVP, Chief Human Resources Off 1050 WESTLAKES DRIVE, BERWYN PA 19312
Jean-pierre Clamadieu director 1050 WESTLAKES DRIVE, BERWYN PA 19312
Shadrak W Kroeger officer: Pres., Communications Solution 1050 WESTLAKES DRIVE, BERWYN PA 19312
Abhijit Y Talwalkar director ONE AMD PLACE, PO BOX 3453, SUNNYVALE CA 94088
Tim Murphy officer: SVP & CHRO 1050 WESTLAKES DRIVE, BERWYN PA 19312
Thomas J Lynch director, officer: Chief Executive Officer 7 LAKEVIEW DRIVE, NEWTOWN PA 19840
Syaru Shirley Lin director
Robert J Ott officer: Sr VP & Controller C/O TYCO ELECTRONICS LTD, 1050 WESTLAKES DRIVE, BERWYN PA 19312
Steven T Merkt officer: President, Transportation Sol. 1050 WESTLAKES DRIVE, BERWYN PA 19312
Daniel J Phelan director C/O TYCO ELECTRONICS LTD., 1050 WESTLAKES DRIVE, BERWYN PA 19312
Aaron Kyle Stucki officer: Pres. Communications Solutions 1050 WESTLAKES DRIVE, BERWYN PA 19312
Eric Resch director, officer: SVP and Tax Officer C/O TYCO ELECTRONICS LTD., 1050 WESTLAKES DRIVE, BERWYN PA 19312