Terrence R. Curtin
Chief Executive Officer and Board Member at TE Connectivity
Thank you, Sujal, and we appreciate everyone joining us today. And to start off, I am pleased with what -- that we delivered revenue in line with our guidance and earnings per share that was ahead of guidance, driven by strong execution by our teams across our segments in what continues to be a dynamic market environment.
Before we get into the slides, I do want to take a moment to discuss our performance for the full year, along with what we're seeing in the markets versus our last call. When we look back on fiscal 2023, we set out to accomplish three key initiatives that we shared with you. First was to continue to demonstrate the strategic positioning of our portfolio through alignment to secular growth trends. Second was to deliver strong free cash flow with a focus to drive down inventory levels. And lastly, to improve our margin performance through both cost reduction and pricing actions to offset inflation.
As Heath and I will discuss on today's call, our teams executed successfully on all of these initiatives during the year, and it sets up for a good jumping off-point as we enter 2024. When we think about the performance of the portfolio, our results demonstrated continued growth in the Transportation and Industrial Solutions segments, which offset market weakness in Communications and headwinds from a stronger dollar. We generated growth above the market and a number of our businesses as we continue to benefit from secular trends, including increased global production of electric vehicles, adoption of renewable energy and applications for cloud as well as artificial intelligence.
We delivered record free cash flow of $2.4 billion for the year which represents over 110% conversion, and we also returned $1.7 billion to shareholders for the year. We drove down our inventory levels in response to improvements in our supply chain. And at the same time, we improved our service levels to our customers. Our cash generation model gives us both confidence as well as opportunities to return capital to shareholders and support bolt-on M&A activities which is aligned with our use of capital strategy. We also worked to drive margin expansion in the second half of 2023, and we delivered on this commitment. We improved our exit rate on adjusted operating margins to above 17% as we close the year, despite our Communications segment being in the bottom of the cycle.
Now let me share what we're seeing in our market since our last call 90 days ago. And on an overall basis, markets are playing out as we expected. We have most of our key end markets on a growth or recovery trajectory with a few markets continuing to cycle as we previously discussed with you. Our view of Transportation end markets remains consistent with our prior view with global auto production remaining stable. Our growth will continue to be driven in Transportation by content outperformance that leverages our leading global position in this market.
In our Industrial segment, three out of ourfourbusinesses continue to have growth momentum. You see our strong positioning in renewable energy with growth from both wind and solar applications. Commercial air sales continue to grow as this market recovers, and our medical business is benefiting from increases in interventional procedures. And in our Communications segment, while sales are down significantly versus last year's cyclical peak, we saw a sequential growth in orders in our fiscal fourth quarter due to early ramps of artificial intelligence per ramps, and we continue to expect volume growth from AI applications as we move through 2024.
And finally, I do want to reinforce that the way that we think about long-term value creation remains unchanged. It is built on the pillars of secular growth trends that will drive increased content in the markets where we position TE, strong free cash flow generation with discipline around how we deploy capital and certainly levers up to enable margin expansion as we move forward. So with that as an overview, I'd answer that you turn to Slide three, and I'll get into the presentation and I'll discuss some additional highlights for the fiscal fourth quarter as well as the full year, and Heath will get into more details during his section.
Our fourth quarter sales were $4 billion, which was in line with our guidance. Transportation segment organic growth of 5% was offset by declines in Communications due to the ongoing market weakness that we've been discussing. Adjusted earnings per share was ahead of our guidance and up 2% versus the prior year at $1.78 with adjusted operating margins of 17.3%. Cash flow from operations was a very strong $1.1 billion and free cash flow was $945 million in the fourth quarter, and both of these were quarterly records for the company. And I think this just reinforces a strong execution by our teams, I already highlighted.
For the full year, sales of $16 billion were flat on a reported basis, and we had organic sales that were up 3%, and this 3% organic growth was driven by our Transportation and Industrial segments. Adjusted operating margins were 16.7% for the full year. But on the margin side, the real highlight was that we expanded adjusted operating margins by 120 basis points from the first half to the second half of the year due to our team's execution. As we look forward into the first quarter of fiscal 2024, we are expecting that first quarter sales will be $3.85 billion and adjusted earnings per share to be around $1.70. On a year-over-year basis, we expect sales to be flat with organic growth in our Transportation and Industrial segments. We do expect adjusted EPS expansion of over 10% in the first quarter and strong margin expansion as well year-over-year.
So if you could turn to Slide four, let me discuss order trends and what we've seen. We continue to benefit from markets with strong secular growth trends, and this is offsetting weakness in markets that are cycling or being impacted by inventory destocking. At the total company level, we continue to see stability in our order levels. Orders of $3.9 billion in the fourth quarter were consistent with order levels for the past several quarters, and our backlog remains near record levels. Transportation orders grew both year-over-year and sequentially, reflecting ongoing stable global auto production. Industrial order patterns reflect some seasonality across this segment as well as ongoing destocking in the Industrial Equipment end markets.
And I ask you to keep in mind that 50% of our Industrial Equipment business does go through the distribution channel, and we expect that destocking here to continue for the next couple of quarters. In the Communications segment, while we continue to see our customers work down inventory in their supply chain, we had our second consecutive quarter of sequential order growth, which is being driven by new orders for artificial intelligence applications. So with that as an overview of orders, let me now get into year-over-year segment results in the quarter that are shown on Slides five through seven, and you can see the details on each one of those slides.
So starting with Transportation. Our sales growth remained strong. It was up 5% organically year-over-year, and it was driven by our automotive business. In our automotive business, we grew 9% organically with growth in all regions. Our performance continues to be driven by our leading global position in electric vehicles, electronification trends within the vehicle as well as positive impact from pricing. In fiscal 2023, electric vehicle and hybrid-electric vehicle production grew globally by approximately 40%.
Most of this growth was driven by Asia, and we expect this region to continue to be the growth driver for electric vehicles. As you know, we generate approximately 2 times the content in electric vehicle platforms versus combustion engine vehicles. So we expect our content per vehicle to continue to expand as we move forward. Overall, we expect auto production next year to be about 21 million units per quarter with continued growth in hybrid and electric vehicle production.
In our Commercial Transportation business, we did experience a 7% sales decline, which was in line with what we expected and was driven by market weakness in both North America as well as China. And in our Sensors business, we saw growth in automotive applications that was offset by weakness in industrial applications. At the margin level for the Transportation segment, adjusted operating margins were 18.4% as we expected and up 170 basis points year-over-year as our teams executed on the cost and price actions that we've been highlighting to you.
Now let me discuss the Industrial Solutions segment. And while sales were flat in the fourth quarter, I think what's really nice as you look at the slide is that we have three businesses that are continuing on a very good growth trajectory. Our Aerospace, Defense and Marine sales were up 14% organically, with ongoing improvement in the commercial air market.
In Medical, sales in the quarter were up 19% organically, driven by ongoing increases in interventional procedures. And in our Energy business, as you know, we positioned this business around renewables, and you're seeing the benefit of this again this quarter with 6% organic growth. Finally, in the Industrial Equipment business, our sales were down 21% organically driven by the continued inventory digestion in the distribution channel, a trend that is similar to what you're hearing from other companies. Adjusted operating margins were 15.9% in the quarter, reflecting the impact of expected volume declines in the Industrial Equipment business.
So let's turn to Communications. And while our organic sales were down 27% year-over-year, they were up 9% sequentially to $463 million. We are seeing the benefits from the early ramps of artificial intelligence programs, which will strengthen as we move through 2024 and beyond. Adjusted operating margins were 15.3% for the segment and an increase of over 100 basis points sequentially. And as we see destocking and AI increases in volume, you'll see margins expand in this segment as we move through '24.
So with that, let me turn it over to Heath, who will get into more details on the financials as well as our expectations going forward.
