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Business | January 26, 2012

TE Connectivity reports 1Q sales of USD 3.3<em>bn</em>

TE Connectivity Ltd. reported 1Q (ended Dec. 30, 2011) net sales of $3.3 billion.
Earnings Per Share from Continuing Operations (GAAP EPS) were $0.59 for the quarter and adjusted EPS were $0.66. Included in the GAAP EPS were $0.03 per share of restructuring and other charges, $0.01 per share of acquisition-related charges and $0.04 per share of tax items. Free cash flow was $85 million for the quarter.

Total company orders were $3.2 billion in the first quarter. The book-to-bill ratio was 0.95 overall, and 0.98 excluding the Subsea Communications business.

"The first quarter was a slow start to our fiscal year due to lower-than-expected demand in our Communications and Industrial Solutions segment and our Telecom Networks business. This more than offset continued strength in our Transportation Solutions segment," said TE Connectivity Chief Executive Officer Tom Lynch. "We delivered adjusted operating margins above 12 percent despite the lower sales volume due to pricing and cost reduction actions we implemented in the second half of last year."

2012 OUTLOOK

For the second quarter, the company expects net sales of $3.3 to $3.4 billion and adjusted EPS of $0.64 to $0.68. GAAP EPS are expected to be $0.57 to $0.61, including restructuring and acquisition-related charges of $0.07.

For the full year, the company expects sales of $13.8 to $14.2 billion and adjusted EPS of $2.90 to $3.10. GAAP EPS are expected to be $2.70 to $2.90, including restructuring and acquisition-related charges of $0.20. This compares to fiscal 2011 revenue of $14.0 billion and adjusted EPS of $3.03 excluding the additional week in the year.

"We expect second quarter sales and earnings to be similar to the first quarter. We also expect our second half sales to increase by approximately 10 percent compared to the first half due to normal seasonal increases and the completion of customer inventory corrections," said Lynch. "At these sales levels, our adjusted operating margins should return to about 14 percent."

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