Terrence R. Curtin
Chief Executive Officer & Director at TE Connectivity
Thank you, Sujal. And as always, we appreciate everyone joining us today.
And before I get into the slides, let me just make some comments. For our fourth quarter, I am pleased that we delivered revenue and adjusted earnings per share that was ahead of our guidance, driven by continued solid execution across the segments. Our teams delivered consistently in 2024 on the operational levers to drive margin improvement along with strong cash flow generation, which was our key focus that we discussed with you all throughout this year. We delivered strong margin expansion and double-digit growth in adjusted earnings per share in what continues to be a dynamic market backdrop.
When we look at our results for fiscal 2024, we delivered record operating margins, earnings per share and free cash flow, and I guess few things to highlight building on this. We generated over 200 basis points of adjusted operating margin expansion and double-digit earnings growth year-over-year against the flattish volume environment. We also continue to demonstrate the strategic positioning of our portfolio and alignment to secular trends as we benefit from the electrification and increased data connectivity adoption within the vehicle, growth in renewable energy and aerospace and defense markets, and accelerated momentum in artificial intelligence applications. And the content outperformance that we saw in these markets were offset by the softness we saw in the broader industrial markets.
And lastly, we demonstrated the strength of our cash generation model with free cash flow of approximately $2.8 billion and disciplined capital deployment that included a strong return to shareholders. I'm also pleased today to announce that our Board authorized a $2.5 billion increase to our share repurchase program that reinforces our value creation model.
Now let me share some of the market trends and what we're seeing versus our earnings call that we did 90 days ago. We do continue to have some markets that are accelerating, some that are stable and some that are weak that are still trying to gain some traction and let me highlight them by our segments. In our Transportation segment, global auto production was essentially flat in fiscal 2024, with growth in Asia being offset by declines of production by Western OEMs. As we look forward, we expect a slight decline in global auto production in fiscal 2025. We do expect continued growth in hybrid and electric vehicle production, with over 70% of that production occurring in Asia, which is our largest revenue region in auto and where we're extremely well positioned. We also expect further electronification in the vehicle which will benefit across all powertrains and will continue to drive content growth for us.
In the commercial transportation markets, we continue to see end market declines with some potential improvement in the cycle later in 2025. In our Industrial segment, we continue to see strong growth in the aerospace and defense and energy markets coupled with ongoing weakness in factory automation, and that's particularly weak in Europe. In the Communications segment, growth trends that we've been talking about are continuing. In the cloud data center, we see momentum accelerating in artificial intelligence across our broad customer base. We had $300 million of sales for AI applications in fiscal 2024, which is higher than our expectations and we expect these sales will double in fiscal 2025. We are set up for strong performance in fiscal '25 which will build upon the momentum we established in '24.
While we're continuing to work through sluggish industrial end markets, we do expect them to return to growth in 2025. We also are continuing to invest in our engineering skills, technology and operations capacity to support the growth. Key examples of some of the larger investments we are making are the further expansion of our Asian operations to support the ongoing growth in EV in that region, as well as our continued investment to expand our engineering and capacity to support the ramps of design wins that we have in AI. With these investments and what we see in our end markets, we do expect an acceleration of growth as we move through this coming year.
Finally, I want to reiterate that our long-term value creation model is centered around having a portfolio aligned to secular growth trends, operational efforts to drive further margin expansion, and a strong cash generation model to return capital to shareholders while investing in bolt-on M&A opportunities. Executing on these pillars will enable sales growth, margin and EPS expansion and strong cash generation in fiscal 2025 and beyond.
So with that as an overview, let me get into the presentation starting with Slide 3 and I'll jump into some additional highlights and our guidance for the first quarter of fiscal '25 and then Heath will jump into more details in his section. Our fourth quarter sales were $4.1 billion which was above our guidance and up 2% organically year over year. The upside versus our expectations was driven by the communications segment with higher sales from artificial intelligence applications. Adjusted earnings per share of $1.95 was ahead of our guidance on a quarterly record and was up 10% versus the prior year. Our adjusted operating margins were 18.6% and they were up 130 basis points over last year. Our free cash flow generation was very strong and was approximately $830 million in the fourth quarter.
Now let me turn to the full-year results that you see on the slide. Full-year sales were $15.8 billion with organic growth in Communications and Transportation segments offset by weakness in our industrial equipment end markets and headwinds from a stronger dollar. Adjusted earnings per share was $7.56 and was up 12% versus the prior year, and please keep in mind that this included $0.39 of currency exchange and tax headwinds. Adjusted operating margins were 18.9% for the full year and they expanded 220 basis points over '23.Tthe high quality of our earnings continues to be reflected in our cash generation model and I'm pleased with our record free cash flow of approximately $2.8 billion in 2024.
Now as we look forward to the first quarter of '25, we are expecting our sales to be $3.9 billion, up 2% year over year and it reflects the typical seasonality in our business. We expect adjusted earnings per share to be around $1.88 and this includes a $0.04 tax rate headwind versus the prior year.
Now if you could please turn to Slide 4, let me make some comments on the order trends that are highlighted there. Our orders were over $3.8 billion, reflecting typical seasonality, ongoing momentum in AI programs and continued weakness in general industrial end markets. By region, our order patterns reflect strength in Asia with weakness in the West. In Transportation, sequential order patterns reflect stability in global auto production along with ongoing market declines in commercial transport. In auto, our orders continue to reflect growth in Asia with weakness in Western markets.
In the Industrial segment, we continue to see softness across factory automation and building our automation, particularly in Europe. And in our Communications segment, our order levels came in as we expected and they increased nearly 40% year-over-year, in addition to the strong order growth we had last quarter. This supports the strong growth we're expecting in fiscal 2025 from artificial intelligence programs and the trends and the innovation that are happening in these applications is an exciting growth opportunity for both TE and our industry.
Now with that as a backdrop about orders, let me get into segment results and I'll start with our Transportation segment that is on Slide 5. Highlighting our ability to generate growth over market, our auto business declined 1% organically against a global auto production decline of 5% in the fourth quarter. The 400 basis points of outperformance versus production was driven by double-digit organic growth in Asia, offset by mid-single-digit declines in the West. And quite frankly, this continued the trends that we've been seeing by region all year. As everybody knows, automotive production and car sales dynamics are very different by different regions in the world.
We do continue to expect content growth to be in the 4-point to 6-point range long term. This is supported by data connectivity and further electronification benefit across all powertrains, our leading global position in hybrid and electric vehicles, and our strong position in Asia. I do want to emphasize that and remind everyone that over 70% of EV and HEV production occurs in Asia, where we are very well positioned and we expect the adoption of EVs and HEVs in Asia to continue the pace they've been at. Our differentiated position is proven by the fact that we grew sales in mid-teens in Asia this year in an environment where regional production was only up mid-single digits.
Turning to the Commercial Transportation business, we did see a 4% organic decline and this was primarily driven by weakness in Europe. We do expect this business to be down again sequentially in the first quarter with potential improvement in the cycle as we move throughout the year. In our Sensors business, the sales decline continued to be driven by market weakness in industrial applications, as well as portfolio optimization efforts that we've talked to you about. We do expect these exits that we've talked about to be completed in 2025. For the Transportation segment, adjusted operating margins were 19.3% in the fourth quarter. For the full year, we delivered 20% adjusted operating margins and these were up 300 basis points year-over-year, driven by strong operational performance. And we expect our first quarter margins to be similar to the fiscal year '24 levels.
So please turn to Slide 6 and let me get into the Industrial Solutions segments. As you can see on the slide, our AD&M sales were up 14% organically, driven by growth in the Commercial Aerospace and Defense markets. In both of these markets, we continue to see favorable demand trends, as well as ongoing supply chain recovery. In our Energy business, sales were up 14% organically, driven by strength in the Americas and in Europe. We continue to benefit from momentum in renewables, as well as investments that are being made to support increased power generation needs. Our medical business declined slightly in the quarter and the Industrial Equipment business declined 20% organically. For the full year, we saw growth in the aerospace and defense, energy, and medical businesses.
On the margin front, Industrial segment margins were 15.6% and this was in line with our expectations given the current volume levels and business mix. So let me wrap up the segment discussion with the Communications segment and this is on Slide 7. Our Data & Devices business grew 35% organically and our design wins are reflecting accelerating momentum. Our AI revenue came in at $300 million in fiscal 2024 and we expect sales from AI applications to double from this level in fiscal 2025 from design wins across a broad base of customers.
Our appliance business grew double digits again for the second quarter in a row and this was really driven by strength that we saw both in the Americas, as well as in Asia. The segment had adjusted operating margins of 21.7% and this was aligned with our expectations. Margins did show a significant improvement over last year and that was driven by strong operating leverage on the higher volume that we had on the segment.
So with that summary, let me turn it over to Heath, who will get into more details on the financials, as well as our expectations going forward.
