TE Connectivity profit beats, but outlook below views
(Reuters) - TE Connectivity Ltd (TEL.N) reported a higher-than-expected quarterly profit, but the maker of electronic connectors used in cars and consumer devices gave a forecast below Wall Street estimates, saying the economy was weaker than expected.
The company also said on Monday it would take $200 million in charges this fiscal year to restructure operations, including closing some factories to cut capacity in its consumer and network businesses.
TE Connectivity's consumer products go into mobile devices and appliances; its network connectors include undersea telecommunications and systems used by utilities and manufacturers.
"We saw our order rates slow, and this slowdown was pretty much across the board in Europe and in our industrial business in the U.S. and Asia," Chief Executive Officer Tom Lynch said.
Lynch said earnings would still increase this year if sales are flat, because of a stock buyback and improved productivity. If sales revive, profit could rise 15 percent.
TE Connectivity said it had earned a net $396 million, or 92 cents per share, in the fourth quarter ended September 28, compared with $326 million, or 75 cents per share, a year earlier.
Excluding tax items and restructuring and other charges, earnings were 76 cents a share, 2 cents more than analysts had expected, according to Thomson Reuters I/B/E/S.
Sales fell to $3.36 billion, slightly below estimates.
Lower sales to industrial and consumer electronics markets offset higher revenue from auto, aerospace and other transportation markets. Demand in Europe and China is slowing and will hit first-quarter results, the company said.
TE Connectivity, formerly called Tyco Electronics, said it expected a first-quarter profit of 62 cents to 66 cents a share, excluding items, on sales of $3.15 billion to $3.25 billion.
Those ranges were below Wall Street forecasts for earnings of 74 cents on sales of $3.39 billion.
TE Connectivity shares were up 1.5 percent at $32.87 in midday trading.
(Reporting By Nick Zieminski in New York; Editing by Gerald E. McCormick and Lisa Von Ahn)
- U.S. war veteran released by North Korea returns home |
- Pennsylvania newlyweds "just wanted to murder someone together:" police
- Ice storm causes blackouts, delays in Texas, Arkansas
- WTO overcomes last minute hitch to reach its first global trade deal
- China's parliament: Japan has "no right to criticize" air defense zone