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TE Connectivity Management Discusses Q3 2012 Results - Earnings Call Transcript

And the cash flow, as we mentioned earlier, was very strong and we completed the sale of our Touch and Services business which generated approximately $400 million of proceeds.

We entered a little bit on the market environment. We entered the quarter with order momentum building across most of our markets and in particular, in Telecom Networks and our CIS businesses, as the economic outlook was improving in the U.S. Inventories in the channel were back in line, and we experienced a seasonal lift we typically see at this time of the year, especially in our Networks business. So things were tracking pretty much as expected.

In mid-May, this momentum began to stall and orders began to soften, especially in Telecom and our Industrial and Appliance businesses. We haven't seen a pronounced decline, but we have seen a softening.

Demand in the automotive and commercial aerospace businesses continues to be solid and we are building in the momentum in the Consumer business.

These trends, coupled with the uncertainty in Europe which is having an impact from a demand and a foreign exchange perspective, and the lower-than-expected growth in China, is resulting in a reduction in our guidance for Q4. I'll go through the details later in the call.

I do expect us to maintain our margin in the 13.5% to 14% range in Q4, despite the softness, and to deliver another strong cash flow quarter. We also plan to resume our share repurchase program in Q4, and I'll comment more on capital allocation later.

Before we move into the review of our results and outlook, I'd like to recap the organization changes we announced last week, so if you can turn to Slide 4.

These changes have been in the planning stage for some time. The regrouping of our business units into these 4 segments had 2 primary objectives. Enabling us to best leverage our capabilities for the customer, and further optimize our efficiency. And we also believe this will provide improved information regarding the performance of the company for our investors.

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