Benzinga | Jul 28, 2021 07:24AM EDT

TE Connectivity Beats On Q3 Earnings Aided By Segment Strength, Posts Better Than Expected Q4 Guidance

* TE Connectivity Ltd (NYSE:TEL) reported third-quarter FY21 net sales growth of 51% year-on-year to $3.85 billion, beating the analyst consensus of $3.74 billion. It recorded organic growth of 45% Y/Y.

* Revenue from Transportation Solutions rose 80.5% Y/Y to $2.3 billion, Industrial Solutions increased 15.8% Y/Y to $1 billion, and Communications Solutions grew 35% Y/Y to $578 million.

* The gross margin expanded 523 basis points to 33%, and the non-GAAP operating margin expanded 970 basis points to 19.1%.

* The non-GAAP EPS of $1.79 beat the analyst consensus of $1.58.

* TE Connectivity generated $682 million in operating cash flow and held $1.4 billion in cash and equivalents. It returned $447 million to the shareholders.

* Q4 Outlook: TEL expects strong performance to continue into the Q4 with double-digit sales growth and significant EPS growth Y/Y aided by a recovering economic backdrop, content growth, and leadership positions in long-term technology trends.

* It anticipates Q4 net sales of $3.8 billion above the analyst consensus of $3.72 billion and sees a non-GAAP EPS of $1.65, above the analyst consensus of $1.54.

* Price action: TEL shares closed lower by 0.73% at $137.65 on Tuesday.