TEL

TE Connectivity is operating well even though the headline earnings look ugly. FY2025 revenue grew 8.9% to $17.3B (6.4% organic per MD&A), operating income rose 14.8% to $3.21B and operating cash flow jumped 19% to $4.14B — yet net income fell 42.3% to $1.84B and diluted EPS dropped 40.4% to $6.16. That divergence (operating profit up, net profit down) means the EPS collapse is driven by below-the-line items, not the core business; the 35.3x trailing P/E is therefore misleading. Management's own Q1-FY2026 guide — ~$4.5B sales (vs $3.8B, +18%) and ~$2.33 diluted EPS — annualizes toward roughly $9+ of forward EPS, implying a far more digestible low-20s forward multiple.

The mix is what makes this interesting: Industrial Solutions grew 23.7%, led by 'digital data networks; energy; automation... and aerospace, defense' — i.e. the data-center/AI buildout MD&A explicitly calls out as 'enabling artificial intelligence.' That offset a soft Transportation segment (-1.0%, weak sensors and commercial transport), the cyclical auto exposure the Risk Factors flag as the company's key demand sensitivity. Cash generation is genuinely strong — ~$3.2B free cash flow after $936M capex — funding $1.35B of buybacks and $803M of dividends while shrinking the share count.