0001104659-26-048160
SEC filingQ2 delivered strong revenue growth and profitability expansion, fueled by higher volumes across Industrial and Transportation Solutions segments alongside productivity gains and favorable pricing dynamics.
TE Connectivity Ltd. reported robust Q2 FY2026 results, with net sales reaching $4.7 billion, up 14.5% from $4.1 billion in the prior year. This increase stemmed from sales growth in both the Industrial Solutions and Transportation Solutions segments, complemented by net pricing actions that positively affected organic net sales. Investors benefit from this broad-based demand as it underscores resilience across end-markets served by our connectivity solutions.
Gross profit expanded to $1.7 billion, a 19.6% rise from $1.5 billion, driving gross margin to 36.8%. Excluding specific items, operating income increased primarily from higher volume, while our commitment to continuous productivity improvements helped offset cost pressures. Cost of sales remains exposed to raw material price fluctuations, but these efforts enhance margin durability, positioning us to capture more value from sales growth.
Operating income climbed 27.5% to $954 million, representing 20.1% of sales, up from prior levels. This reflects effective cost management, with savings reflected in cost of sales and selling, general, and administrative expenses. We actively simplify our global manufacturing footprint by migrating to lower-cost regions and eliminating excess capacity, which sustains operating leverage as volumes expand.
Net income reached $855 million, with diluted EPS at $2.90, a transformative improvement that highlights normalized earnings power. Net cash provided by operating activities rose to $1.8 billion, driven primarily by higher pre-tax income despite changes in working capital and increased tax payments. This generated $1.3 billion in free cash flow after $528 million in capital expenditures, affirming our capacity to fund growth initiatives.
Our liquidity remains strong, with sufficient financial resources to meet ongoing working capital and cash flow needs. Cash from operations, supplemented by available funding sources, supports anticipated capital requirements. These dynamics reinforce TE Connectivity's ability to navigate market uncertainties without material impact on operations or financial position.