TE Connectivity Ltd. (TEL) has reported 57.98 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $437 million, or $1.22 a share in the quarter, compared with $1,040 million, or $2.57 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $455 million, or $1.27 a share compared with $364 million or $0.90 a share, a year ago.

Revenue during the quarter grew 11.66 percent to $3,332 million from $2,984 million in the previous year period. Gross margin for the quarter expanded 69 basis points over the previous year period to 33.13 percent. Total expenses were 84.48 percent of quarterly revenues, down from 86.36 percent for the same period last year. This has led to an improvement of 188 basis points in operating margin to 15.52 percent.

Operating income for the quarter was $517 million, compared with $407 million in the previous year period.

However, the adjusted operating income for the quarter stood at $551 million compared to $488 million in the prior year period. At the same time, adjusted operating margin improved 18 basis points in the quarter to 16.54 percent from 16.35 percent in the last year period.

"The fourth quarter was a strong finish to a solid year for TE, despite a challenging macro environment," said TE Connectivity chairman and chief executive officer Tom Lynch. "Our performance was led by strength in several businesses including Automotive, Commercial Transportation, SubCom, Aerospace and Defense, and Energy. We continued to build our harsh environment portfolio with the acquisition of Intercontec, which expanded our product range in the industrial equipment market. Our SubCom business continued its momentum by being awarded a contract in October for the Pacific Light Cable Network, a trans-pacific cable installation for Google and Facebook."

For the first-quarter, Tyco Electronics forecasts revenue to be in the range of $2,950 million to $3,050 million. The company expects diluted earnings per share to be in the range of $0.84 to $0.88. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.98 to $1.02.

For fiscal year 2017, Tyco Electronics forecasts revenue to be in the range of $12,300 million to $12,900 million. The company expects diluted earnings per share to be in the range of $3.84 to $4.14. The company expects diluted earnings per share to be in the range of $4.19 to $4.49 on adjusted basis.

The company has spent $1,581 million cash to meet investing activities during the year as against cash inflow of $636 million in the last year. It has incurred net capital expenditure of $620 million on net basis during the year, up 6.35 percent or $37 million from year ago.

The company has spent $3,030 million cash to carry out financing activities during the year as against cash outgo of $1,606 million in the last year period.

Cash and cash equivalents stood at $647 million as on Sep. 30, 2016, down 80.56 percent or $2,682 million from $3,329 million on Sep. 25, 2015.
 

Working capital drops significantly
TE Connectivity Ltd. has witnessed a decline in the working capital over the last year. It stood at $1,709 million as at Sep. 30, 2016, down 60.35 percent or $2,601 million from $4,310 million on Sep. 25, 2015. Current ratio was at 1.56 as on Sep. 30, 2016, down from 2.20 on Sep. 25, 2015.

Cash conversion cycle (CCC) has decreased to 41 days for the quarter from 43 days for the last year period. Days sales outstanding went down to 30 days for the quarter compared with 32 days for the same period last year.

Days inventory outstanding has decreased to 35 days for the quarter compared with 36 days for the previous year period. At the same time, days payable outstanding went down to 24 days for the quarter from 26 for the same period last year.