By Nick Zieminski
July 25 TE Connectivity Ltd reported a quarterly profit on Wednesday that beat recently reduced estimates, but cut its full-year sales and earnings forecasts, citing the strong dollar and soft demand in a business that serves energy and telecommunications sectors.
The electronic connector maker previously called Tyco Electronics posted net income of $199 million, or 46 cents per share, for the third quarter ended on June 29, compared with $355 million, or 80 cents per share, a year earlier.
Excluding special items, earnings were 79 cents a share, 1 cent ahead of estimates, according to Thomson Reuters I/B/E/S.
Sales fell to $3.50 billion from $3.58 billion.
TE's transportation segment, which makes connectors used in cars, had higher sales, but revenue was down in two other segments. Commercial construction, factory automation and rail markets are slowing down, the company said.
In consumer devices, demand from makers of cellphones and tablets was offset by soft sales to manufacturers of consumer electronics and personal computers.
Estimates came down last week after TE warned about third-quarter sales and named a new finance chief.
The company, whose peers include Molex Inc and Amphenol Corp, said revenue was suffering because of the strong dollar, which reduces the value of overseas sales, and weakness in its network solutions business, which supplies infrastructure components for energy and telecommunications.
TE forecast full-year revenue of $13.25 billion to $13.35 billion, reducing the midpoint by about $250 million compared with its April forecast. Softer sales in two segments account for most of the change; the rest is from currency.
The strong dollar represents a 3-cent-per-share hit to earnings compared with the April forecast. TE said it expected earnings of $2.82 to $2.86 per share before special items, lowering the midpoint of its range by 9 cents.