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July 28, 2025 • 3 min read
TE Connectivity, a global leader in connectivity and sensor solutions for industries ranging from automotive to data centers, recently released its financial results for the third quarter of fiscal 2025. Let's delve into their latest 10-Q filing to understand the key drivers behind their performance and what it signals for the company's direction.
TE Connectivity reported a strong quarter, with net sales climbing an impressive 13.9% year-over-year to $4.534 billion. This growth translated nicely to the bottom line, with net income reaching $638 million, or $2.14 per diluted share, up from $573 million in the same period last year. Gross margin also saw a healthy improvement, expanding to 35.3% from 34.8%.
To visualize how the company's revenue translates into profit after accounting for various costs, here is a flow diagram of the income statement for the quarter.
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A significant event this quarter was the acquisition of Richards Manufacturing Co. on April 1, 2025, for approximately $2.3 billion in cash. Richards Manufacturing is a U.S.-based producer of electrical and gas distribution products. This move bolsters TE's position in the energy market and has already contributed $73 million to the quarter's net sales.
Effective this fiscal year, TE Connectivity streamlined its reporting into two main segments: Transportation Solutions and Industrial Solutions. The story of this quarter is the exceptional performance of the Industrial Solutions segment.
Industrial Solutions: This segment, which includes businesses like aerospace, medical, energy, and digital data networks, saw its sales soar by 30.0% to $2.116 billion. The standout performer was the digital data networks business, which grew a staggering 84.2%, driven by booming demand for artificial intelligence applications. The energy business also posted remarkable growth of 69.9%, powered by grid modernization, renewable energy projects, and the new Richards Manufacturing acquisition.
Transportation Solutions: This segment, which houses the company's automotive, commercial transportation, and sensor businesses, posted more modest growth of 2.8% to $2.418 billion. While sales in the automotive market grew 3.3%, primarily due to strength in the Asia-Pacific region, the performance reflects a more challenging global automotive production environment compared to the high-growth industrial markets.
Looking ahead, TE Connectivity is optimistic, forecasting net sales of approximately $4.55 billion for the fourth quarter of fiscal 2025. This outlook suggests continued momentum, supported by the recent acquisition and sustained strength in its industrial end markets.
The company is also rewarding its shareholders, having repurchased $916 million of its shares in the first nine months of the fiscal year and declared a quarterly dividend of $0.71 per share.
In conclusion, TE Connectivity's third-quarter results paint a picture of a company successfully capitalizing on major technology trends. The strategic pivot towards high-growth industrial areas like AI infrastructure and renewable energy is paying off handsomely, creating a powerful new engine for growth that more than compensates for the cyclical nature of its traditional automotive markets. The acquisition of Richards Manufacturing further cements this strategy, positioning TE to be a key enabler of a more connected and sustainable future.
Last updated: July 28, 2025