October 17, 2011 - TE Connectivity Ltd. (TEL-NYSE) provides engineered electronic components, network solutions, specialty products, and subsea telecommunication systems.

The company's Network Solutions segment supplies infrastructure components and systems for telecommunications and energy markets. This division provides components comprising connectors, above- and below-ground enclosures, heat shrink tubing, cable accessories, surge arrestors, fiber optic cabling, copper cabling, and racks for copper and fiber networks; electronic systems for test access and intelligent cross-connect applications; and integrated cabling solutions for cabling and building management. This segment also sells insulators, power measurement products, CATV accessories, network interface devices, raceway systems, and duct accessories.

Its Specialty Products group offers engineered custom solutions, components, and connectors for electronic systems, subsystems, and devices in the aerospace, defense, and marine; touch systems; medical; and circuit protection markets.

The company's Subsea Communications segment designs, builds, maintains, and tests undersea fiber optic networks for the telecommunications, and oil and gas markets. It sells in the Americas, Europe/the Middle East/Africa, and Asia-Pacific regions. The company was formerly known as Tyco Electronics Ltd. and changed its name to TE Connectivity Ltd. on March 10, 2011. TE Connectivity Ltd. was founded in 1941 and is based in Schaffhausen, Switzerland.

Revenues were hit noticably in 2009, dipping to $10.256 billion from $14.834 billion in '08. But 2010 saw a strong rebound with sales finishing at $12.07 billion. This year, 11 analysts have a consensus estimate of $14.34 billion, then see $15.16 billion in 2012. (Fiscal year ends September 30)

Third quarter sales make the point: up 23% compared to last year's third period, rising to $3.1 billion. The main reasons: Transportation Solutions which saw more orders from auto manufacturers who needed more TE electronic products and Network Solutions which saw the benefit from the acquisition of ADC Telecom for $1.25 billion. ADC is a network-solutions company with expertise in 3D TV, smartphones and video conferencing. The acquisition doubled the size of Tyco's networking business.

Third quarter earnings came in at 78 cents a share, 10% better than the 71 cents analysts predicted. For the fourth fiscal quarter, 11 analysts have a consensus estimate of 86 cents a share. Last year's fourth was 72 cents. For the full year, they see $3.08, well above the $2.54 of last year. For 2012, projections are for $3.32 (with a range of $3.06 to $3.56).

Management is optimistic for the next several quarters at least, even with some concern over general economic conditions. It believes auto manufacturing will continue strong and expects higher demand from the industrial and infrastructure businesses. Japan is improving but is still well below levels before the earthquake devastation.

Better operating and profit margins are anticipated as the ADC acquisition accelerates TE's growth in the global broadband connecitivity market and produces better efficiencies. Also, volumes should increase as auto manufacturers require more electronic components.

Essential numbers:
- Market Cap: $14.83 billion
- Forward P/E: 10.3
- Price to book: 1.93
- Operating margin: 13.64%
- Profit margin: 8.98%
- Return on assets: 6.69%
- Total cash: $1.21 billion
- Cash per share: $2.80
- Total debt: $2.67 billion
- Current ratio: 1.86
- Book value per share: $17.50
- Beta: 2.08
- 52 week change in price: 10.14%
- Total Shares Outstanding: 433.39 million
- Float: 432.41 million
- Held by insiders: .16%
- Held by institutions: 93.5%
- Annual dividend: 88 cents
- Yield: 2.7%

TE Connectivity is riding the car wave. It's also expanding its presence in broadband connectivity, one of the strongest growing business opportunities. As was seen in 2009, it's not immune from global economic slumps. But it rebounded quickly and seems to be on an upward path in sales and earnings. As long as global economies continue to improve, investors can expect the same from TE's stock price.

- Company Web site: www.tycoelectronics.com