Terrence R. Curtin
Chief Executive Officer and Board Member at TE Connectivity
Yeah. Thank you Sujal, and also thank you everyone for joining us today to cover our results for our first quarter along with our outlook for the second quarter of our fiscal 2022. As I normally do and before Heath and I take you through the slides, I want to provide some key takeaways that frame our performance relative to the broader environment that we continue to operate in. Our results represent a strong start to our fiscal year in a world that continues to have challenges. Our first quarter builds upon the strong momentum that we demonstrated throughout our fiscal 2021 and things are playing out as we expected, including the outlook for our markets.
We also continue to be excited about the growth opportunities where we have positioned TE around as well as a strong operational performance of our teams to expand margins and drive earnings and cash flow growth as we go forward. In our first quarter, we delivered strong results in each segment. On a year-over-year basis in quarter one, we delivered sales growth of 8% and adjusted earnings per share growth of 20% along with operating margins of 18.6%, which were up 90 basis points over last year. On an EPS perspective, our adjusted earnings per share of $1.76 was a record for our first quarter.
The demand environment also continues to be strong as evidenced by the orders I will talk about and our orders remained above $4 billion in the quarter. And what you'll see is this reflects strength across many of our end markets and provides a positive indicator of ongoing future growth. What we like about our performance in the first quarter is that it continues to demonstrate the strength and diversity of our portfolio. Our Industrial and Communication segments grew over 20% and 40% respectively, more than offsetting expected impact from the mid-teen auto production declines that impacted our Transportation segment.
Also, you continue to see in our results the benefits of where we strategically positioned our engineering investments around certain secular trends. This is generating market outperformance in each of our segments as a result of this positioning. The content story growth is real and we continue to benefit from our leading position in electric vehicles, factory automation as well as cloud applications. 20% of our auto sales are now driven by hybrid and electric vehicles and we continue to see ongoing content growth in auto around electronification across both electric and combustion engine platforms. We are also generating content outperformance from automation and in Internet-of-Things and manufacturing and higher speeds and greater efficiency in the data center.
And also throughout today's presentation, I think it's going to show our teams continued to execute well in a challenging supply chain environment and is clearly reflected in our first quarter results as well as our second quarter guidance. We are also pleased that we continue to generate performance that is in line with our long-term business model goals. And our first quarter results when you look with our second quarter guidance imply first half growth of 5% growth in sales and 13% growth in adjusted EPS versus the first half of last year along with continued margin expansion.
This strong performance was within a backdrop of global GDP growth environment and higher end demand across most end markets where we have strategically positioned TE. We are seeing broad strength in capital expenditures that relate to factory automation, expansion and manufacturing capacity, cloud and datacenter investment as well as investment in renewable energy sources. If you look on the consumer side of the economy, demand for autos remains healthy with auto production improving sequentially in our first quarter and we continue to see content growth to drive market outperformance in both our Commercial Transportation and Auto businesses.
We continue to see expansion in our content per vehicle driven by our leading position in electric vehicles, as well as ongoing expansion of electronification in both internal combustion and EV platforms. And we clearly expect that this trend is going to continue as we move forward. Certainly while this demand environment is positive, we are still in a world that deals with COVID as well as supply chain challenges. The supply chain challenges and inflationary pressures that we've been discussing since the onset of COVID are slightly worse than 90 days ago, but I do want to highlight, I'm pleased with how we are managing through this and making continued progress towards our business models despite these ongoing factors.
With the healthy demand in the current state of the global supply chains, our ability to produce will be a key factor of our near-term revenue performance. We continue to benefit from our global manufacturing strategy to produce in-region and our teams continue to drive price actions and productivity initiatives across all three of our segments. So with that as a backdrop, let me now turn to the slides and discuss some additional highlights and I'll start on slide 3. Our quarter one sales of $3.8 billion were up 8% on both a reported and organic basis and adjusted earnings per share was $1.76, which is up 20% year-over-year and a record for our first quarter, as I mentioned earlier.
Adjusted operating margins were 18.6%, up 90 basis points year-over-year driven by the growth and strong operational performance in our Industrial and Communication segments. We do continue to see a strong demand environment, which is reflected in our orders of $4.3 billion and I'll get into more details on the orders on the next slide. Looking at free cash flow, we generated approximately $370 million of free cash flow in the quarter and we returned approximately $410 million to shareholders through buybacks and dividends during the quarter.
And moving away from financials for a minute, I do want to highlight that we continue to be recognized for our ESG initiatives and we were named to the Dow Jones Sustainability Index for the 10th consecutive year, along with our recent ranking in the top 20 of Investor Business Daily's 100 best ESG companies. I think importantly, we remain committed to our goal of decreasing Scope 1 and Scope 2 greenhouse gas emissions by over 40% on an absolute basis by 2030, which is above and beyond the 27% reduction that we've already made over the past decade. And while I talked about our team's performance about their execution, let's face it, to make these sustainability investments is also how our employees engage in that as well. And I'm very pleased with the progress of how our employees are engaging as we drive sustainability initiatives across TE.
So let me turn to guidance for the second quarter and we expect that the strong performance of our portfolio to continue in our second quarter with approximately $3.8 billion in sales, and this will be up 2% on a reported basis and 3% organically versus the prior year despite the year-over-year decline in auto production. We expect double-digit growth in both Industrial and Communication segments to drive our second quarter growth, once again reinforcing the diversity of our portfolio. We do expect adjusted EPS to be approximately $1.70 in the second quarter, and this will be up 8% year-over-year.
So now let me get into the order trends and markets and if you could please turn to slide 4 where you see our order progression by our segments. For the first quarter, our orders were $4.3 billion and our book-to-bill was 1.13 and we saw a year-over-year and sequential growth in our Industrial and Communication segments. In our largest segment, Transportation, order levels came in as we expected and our book-to-bill was 1.0, which aligns closely to auto production trends. Global auto production came in slightly better than we expected in the first quarter at approximately 19 million units and we expect our auto production will remain at a similar level in the second quarter, reflecting roughly a 5% reduction year-over-year in auto production.
We continue to anticipate that auto production will improve in the second half compared to the first half and will return to year-over-year growth as we move through 2022. In addition to production, the trends around content remained strong. And we continue to expect outperformance to be at the high end of our 4% to 6% range in 2022 as we continue to benefit from increased electronification and higher production of electric vehicles, which we expect will be up over 30% globally this year. Now, when you think about transportation, there's certainly ongoing challenges with semiconductors and the broader supply chain that continue to be a governor for our auto customers' ability to produce.
When you look beyond the near-term noise in the auto supply chain, we continue to see a favorable setup for longer-term auto production growth with healthy consumer demand and dealer inventories that remain extremely low. So let me turn to the industrial segment orders and what's nice is for the first time since the onset of COVID, sequential order strengthened across all businesses in this segment. We see an improving backdrop with increased capital expenditures for factory automation, manufacturing capacity-related to electric vehicle infrastructure in semiconductors, as well as investments in renewable energy.
And this increased capital investment benefits our Industrial Equipment and Energy businesses in the segment. On top of that strength, we've seen improved order trends in our Comm Aer and Medical businesses that we expect to begin to see favorable year-over-year revenue comparisons in those business later this fiscal year, excuse me. If you look at our Communication segment, our order growth in the first quarter was driven entirely by our Data and Devices business and reflects an increased outlook for cloud capital expenditures as well as our ongoing share momentum. We also see with our D&B customers, they're placing orders out for delivery beyond the current quarter due to the broader supply chain uncertainty.
While we continue to see favorable end market trends in D&D, we are seeing a moderation of the appliance market as we expected, particularly in China and we would expect softening in the appliance market from the first half to the second half of our fiscal year. With that overview of orders and markets by the segments, let me add some color of what we're seeing organically from a geographic perspective, and I'll start on a sequential basis. In Asia-Pacific, and I'll exclude China here -- those orders were up 18%, while in China orders were up 4% sequentially.
And outside of Asia, all orders were essentially flat sequentially. On a year-over-year basis, organically again, Asia-Pacific excluding China orders were up 18%, North America and China orders were up 17% and 2% respectively and we saw a slight decline in Europe of approximately 4%. [Technical Issues] and to briefly discuss our year-over-year segment results and that's laid out on slides 5 through 7. And as I added a lot of color, I'll just hit the high points here. In transportation, our sales were down 2% organically year-over-year with declines in auto, partially offset by growth in commercial transportation and sensors.
Our Auto business declined 6% organically versus auto production declines that were in the mid teens. Once again, you see the separation of our sales performance versus the market due to the content growth. TE's technology and products are enabling high voltage architectures and applications with every leading customer and 20% of our sales are now driven by hybrid and electric vehicle platforms. In Commercial Transportation, we saw 11% organic growth with outperformance versus the market due to content growth drivers that are very similar to our auto business.
And in sensors we saw 5% organic growth, driven by industrial applications as well as new ramps in transportation applications. For a margin perspective in the segment, adjusted operating margins came in as we expected at 18.2%. Now, moving to Industrial segment results, our sales increased 18% organically year-over-year. In the Industrial Equipment area, we were up 40% organically with strong growth in all regions and we're benefiting from the increased capital investment and spending across the globe. In our Energy business, we saw 17% organic growth that's driven by our increased penetration in renewable applications that we've talked about with you.
And in our Medical business, it grew 8% organically as we're starting to benefit from the recovery in interventional procedures. And in our Aerospace and Defense business, our sales declined 3%, which is organically driven by the market dynamics in that space but certainly our orders show a more positive outlook as we move forward. From a margin perspective, in the Industrial segment, our adjusted operating margins expanded year-over-year by 130 basis points to 14.8% driven by higher volume as well as a strong operational performance by our teams.
So let me turn to the Communication segment and I just want to start that if you look at performance of both businesses as well as the margin performance, it just shows that our teams continue to execute, while capitalizing on growth trends in the markets we serve. Sales grew 40% organically year-over-year for this segment with strong growth in each of our businesses as you can see on the slide. In Data and Devices we saw strong growth across all regions driven by content growth and share gains in high speed cloud applications as our customer move towards 400 gig and next generation chip platforms as well as growth in server and artificial intelligence applications.
In Appliances, we saw growth in all regions with continued share gains as we continue to differentiate with our customers around our global manufacturing network. And from a margin perspective, the performance was outstanding with another record in adjusted operating margins of 27%, which was up 950 basis points year-over-year, which was strong performance in the prior year as well. And you just take a step back and you look across those segments, our teams continue to capitalize on the growth trends in their end markets, demonstrating the diversity of our portfolio and delivering operational execution with both pricing actions within a challenging supply chain environment.
So with that as an overview, let me give it to Heath and he'll give more details on the financials and our expectations going forward.
