TE Connectivity plc stock research
FY2024 Q2
TE Connectivity (TEL) Gross Margin — Quarter Ended Mar 29, 2024
Revenue and gross profit were higher than the preceding quarter but lower than the same quarter a year earlier. Gross margin was slightly lower than the preceding quarter but higher than the year-ago quarter, reflecting a lower cost of revenue relative to revenue compared to the prior year.
Gross margin takeaway
Quarter ended Mar 29, 2024 · FY2024 Q2
Revenue and gross profit were higher than the preceding quarter but lower than the same quarter a year earlier. Gross margin was slightly lower than the preceding quarter but higher than the year-ago quarter, reflecting a lower cost of revenue relative to revenue compared to the prior year.
- The strongest observable driver is the lower cost of revenue relative to revenue compared to the year-ago quarter, which directly supported the higher gross margin. Gross profit was similar to the year-ago quarter despite lower revenue, indicating a more favorable cost structure.
- Compared to the preceding quarter, revenue and gross profit were higher but gross margin was slightly weaker. Versus the same quarter one year earlier, revenue was lower, but gross profit was higher and gross margin improved markedly.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
34.4%
Gross profit
$1.4B
Revenue
$4.0B
Cost of revenue
$2.6B
Quarter-over-quarter change
-0.2 pts
Year-over-year change
+3.5 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jun 30, 2023 | $4.0B | $1.3B | $2.7B | 32.5% |
| Sep 29, 2023 | $4.0B | $1.3B | $2.8B | 31.8% |
| Dec 29, 2023 | $3.8B | $1.3B | $2.5B | 34.6% |
| Mar 29, 2024 | $4.0B | $1.4B | $2.6B | 34.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 29, 2023
-0.2 pts
Year-over-year change
Mar 31, 2023
+3.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is the lower cost of revenue relative to revenue compared to the year-ago quarter, which directly supported the higher gross margin. Gross profit was similar to the year-ago quarter despite lower revenue, indicating a more favorable cost structure.
Compared to the preceding quarter, revenue and gross profit were higher but gross margin was slightly weaker. Versus the same quarter one year earlier, revenue was lower, but gross profit was higher and gross margin improved markedly.
Monitor the cost of revenue ratio, as it was the primary driver of the year-over-year margin improvement, and note the company's stated monitoring of geopolitical factors for potential future impact.