TE Connectivity announces executive changes and reorganization By Investing.com

TE Connectivity Ltd. (NYSE:), a global industrial technology company, has announced significant leadership and organizational changes, as detailed in a recent SEC Form 8-K filing. The company informed Steve Merkt, President of Transportation Solutions, of the termination of his employment on September 11, 2024. Merkt will transition to an advisory role from October 1, 2024, through the end of the year.

His departure is considered an involuntary termination without cause, and he will receive a one-year notice period through December 31, 2025, followed by a 12-month salary and target annual incentive award, subject to certain conditions including non-compete and non-solicit clauses.

Following this change, Aaron Stucki, currently President of Communication Solutions, will take over as President of Transportation Solutions effective October 1, 2024. Stucki’s new compensation arrangement includes a base salary of $675,000 with annual adjustments, eligibility for an annual bonus up to 95% of his base salary, and annual long-term incentive equity awards valued at $2,600,000.

Additionally, TE Connectivity will undergo a reorganization effective in the first quarter of fiscal 2025 to better align with the company’s strategic goals. The reorganization includes merging the Communications Solutions segment into the Industrial Solutions segment and combining the Appliance and Industrial businesses to create the Automation and Connected Living business.

The new segment structure consists of Transportation Solutions—comprising Automotive, Commercial Transportation, and Sensors—and Industrial Solutions—encompassing Aerospace, Defense, and Marine; Medical; Energy; Digital Data Networks; and Automation and Connected Living.

In other recent news, TE Connectivity has been the subject of significant attention from analysts and has demonstrated strong financial performance. Wolfe Research recently initiated coverage of the company with an Outperform rating, forecasting a resurgence in organic growth and a significant improvement in top-line performance.

This is expected to be driven by the company’s strong position in the automotive sector and the growth potential of its high-speed cable solutions for AI servers.

TE Connectivity’s recent earnings results were also impressive, with the company meeting sales expectations and surpassing earnings per share projections. It generated a record $2 billion in free cash flow over the first three quarters and revised its forecast for AI-related revenues for fiscal year 2024 to $250 million, up from an earlier estimate of $200 million.

Analysts at Citi and Truist Securities have also updated their price targets for TE Connectivity, maintaining a neutral stance on the stock. Citi anticipates mid-single-digit growth into fiscal year 2025, driven by an increase in automotive content and expansion in various sectors.

In addition to these developments, TE Connectivity has expressed potential interest in future mergers and acquisitions aligning with its markets and technologies. The company projects double-digit earnings growth for the full fiscal year, demonstrating confidence in its future performance.

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