The 10-second takeaway
For the quarter ended June 28 (Q3), TE Connectivity beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted slightly. Non-GAAP earnings per share grew. GAAP earnings per share grew significantly.
Margins expanded across the board.
TE Connectivity chalked up revenue of $3.45 billion. The eight analysts polled by S&P Capital IQ expected to see a top line of $3.39 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
EPS came in at $0.88. The 10 earnings estimates compiled by S&P Capital IQ predicted $0.83 per share. Non-GAAP EPS of $0.88 for Q3 were 11% higher than the prior-year quarter's $0.79 per share. (The prior-year quarter included -$0.14 per share in earnings from discontinued operations.) GAAP EPS of $0.80 for Q3 were 74% higher than the prior-year quarter's $0.46 per share. (The prior-year quarter included -$0.14 per share in earnings from discontinued operations.)
For the quarter, gross margin was 32.8%, 370 basis points better than the prior-year quarter. Operating margin was 12.8%, 70 basis points better than the prior-year quarter. Net margin was 9.7%, 400 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $3.47 billion. On the bottom line, the average EPS estimate is $0.92.
Next year's average estimate for revenue is $13.28 billion. The average EPS estimate is $3.16.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on TE Connectivity is outperform, with an average price target of $46.90.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.