Terrence Curtin
Chief Executive Officer at TE Connectivity
Thank you, Sujal. And I also want to thank everyone for joining us today to cover our results for the third quarter along with our outlook for the fourth quarter of fiscal 2022.
As I normally do and before Heath and I get into the details on the slide, I want to take a moment to discuss our performance within the backdrop of the current environment. We delivered strong performance again in the third quarter with record sales and this represents 11% organic growth year-over-year. We had growth in each of our three segments and organic growth across all nine of our business units.
Adjusted operating margins were in the mid-18% range and this is at level similar to where we've been running through the year, despite incremental headwinds that we've been experiencing. And we also delivered record adjusted earnings per share that was above our guidance. I feel our performance is a result of how we strategically positioned our portfolio around secular growth trends, as well as the execution of our teams, both from a manufacturing perspective and in our ability to effectively manage pricing in this inflationary environment. I'm also proud of our teams as they continue to overcome broader macro challenges to effectively serve our customers and deliver the strong financial results we're going to talk about today.
Now let me provide some color on the supply environment, key end demand trends and the development since our call 90 days ago. When we provided our guidance last quarter, we told you about an anticipated impact from the sales - on our sales due to the COVID lockdown in China. And even during these lockdowns extended further into the third quarter than our original expectation, our teams were able to recover and the sales impact to the quarter was negligible.
When you think about the global supply chain challenges and specifically around material availability, I would tell you they are about the same as they were 90 days ago and inflationary pressures continue to linger.
One element that I want to highlight that has changed since the last time we spoke is the strengthening of the U.S. dollar. This strengthening has significantly increased the headwind we're facing from foreign currency exchange rates both year-over-year and sequentially and Heath will talk about that a little bit more, later.
Returning to the markets, customer demand remains strong as evidence by our order levels and our strong backlog position. And just to highlight our backlog has grown over 20% versus the prior year.
And we are seeing some consumer-facing markets like appliance, moderate but we continue to see broad strength across our industrial segment and we still have a number of markets that we serve that are not yet back to pre-COVID levels. And this includes automotive, commercial air as well as medical devices. And we expect growth in these businesses as supply constraints are alleviated and those markets continue to recover.
The other thing that I want to highlight we've consistently talked about and it has not changed is the benefit we continue to see from the secular trends in our markets and the outperformance that we are generating from content growth and share gains. We are benefiting from our position as an industrial technology leader with growth from electric vehicles, smart factory applications, including automation, renewable energy and high speed cloud and artificial intelligence applications. The other thing that I want to highlight that we - as we continue to navigate through this noisy macro environment is that we remain committed to our business model and long-term value creation by driving further growth, margin expansion and strong cash generation.
So with that, as a backdrop, let me get into the slides and discuss additional highlights that are on Slide 3. Our quarter three sales were record at $4.1 billion and this was up 7% on a reported basis and up 11% organically. As I mentioned, we saw growth across each of our segments and organic growth across all of our businesses. Once again, demonstrating the strength and positioning of the portfolio. We generated double-digit organic growth in the Industrial and Communications segments and 8% organic growth in transportation, despite an auto production environment that was essentially flat year-over-year.
Our orders were $4.2 billion in the quarter with a book-to-bill of 1.02. And this shows that the demand environment continues to be strong. And I'll get into more details about order trends by segment, when I get to the next slide. From an earnings perspective, our adjusted earnings per share was a record of $1.86 and that's up 4% year-over-year with adjusted operating margins of 18.6%. From a cash flow generation, our year-to-date free cash flow was approximately $1 billion with approximately $1.6 billion return to shareholders this year. And I will tell you, we've been aggressively shared buybacks as we're taking advantage of the recent market price dislocations with our stock.
As we look forward, we are expecting quarter four sales to be approximately $4.2 billion and adjusted earnings per share to be around the $1.85. Our guidance reflects the benefits of an extra week that we have in the fourth quarter but also factors in the impact of an increased headwind from currency exchange rates. And if you look at the slide, we've provided the details of each of these items and how they impact our fourth quarter.
Before I get the orders. One thing I do want to do is move away from the financials for a moment and highlight that I'm pleased that we issue our 12th corporate responsibility report last quarter which reinforces our One Connected World strategy. When you look at the report, it has many highlights but one of the keys that I think is important was that we were successful in driving a 30% reduction in absolute greenhouse gas emissions in a single year in fiscal 2021.
And this is a very large step towards our goal of achieving a 40% plus absolute reduction in our Scope 1 and Scope 2 greenhouse gas emissions by 2030. So with those being the highlights on Slide 3, let me turn to Slide 4 and I'll discuss order trends as well as what we're seeing in our markets.
For the third quarter, our orders were $4.2 billion as we expected. And this reflects the continued strong demand environment from our customers, as well as we continue to see the impacts of ongoing supply chain volatility in the markets. Our backlog is up over 20% and increased double-digits in each of our segments versus the prior year. It is also important to note that currency exchange headwinds are not only impacting our sales but also when you look in the year and year compares negatively impacts the value of orders in the third quarter.
And this impact when you look at the year and year compare, or orders would be $230 million higher this quarter, if it wasn't for the strengthening of the U.S. dollar. In Transportation, we have a book-to-bill of one in the third quarter which is in line with where the segment has run historically. And keep in mind that we also have a strong backlog position. And demand for autos remains healthy and is significantly higher than what OEMs can currently produce, providing a potential setup for future auto production increases as supply chain bottlenecks begin to resolve and dealer inventories get back to more normal levels.
In our Industrial segment, we saw another quarter of strong orders with a book-to-bill of 1.16 and growth across all businesses year-over-year. We continue to see a favorable backdrop in capital expenditures for factory automation, manufacturing capacity and renewable energy. And these trends benefit both our industrial equipment and our energy businesses. The other thing about our Industrial segment orders are we're continuing to see improving order trends in the commercial aerospace, as well as medical markets, where we expect growth as those markets continue to recover.
In our Communications segment orders reflect a double digit increase in our backlog versus the prior year, along with expected moderation in the appliance market that we've been talking about all year. And one thing, when you look at the communications order trends, it is important to note that our backlog in our Communication segment is approximately $1 billion.
So with that as a backdrop on orders, let me get into the year-over-year segment results that you can see on Slide 7 through 7 and each one of those slides have the details for each segment. So starting with transportation. Our sales were up 8% organically year-over-year. Our auto business grew 9% organically versus auto production that was roughly flat versus the prior year. Global auto production was 18 million units and this was slightly lower than our expectations due to the lockdowns in China. And we do expect some sequential increase in auto production into the fourth quarter.
The trends around our content remain robust as we continue to benefit from increased electronification, as well as higher production of electric vehicles. And we do expect electric vehicles to be up over 30% this year compared to a total auto production environment that is going to be flat. As we look forward, we do expect continued expansion in our content per vehicle and you'll see that as we move from the first half to the second half of this year.
In the commercial transportation market, we saw 10% organic growth driven by North America and Europe with significant market out performance in all regions driven by strong content growth, as well as share gains. In our sensors business, we grew 2% organically and what was nice of that growth was driven by the focus we have on factory automation applications. When you look at earnings for the segment, adjusted operating margins were 17.3% and this was impacted by the inflationary pressures. As you know, there's a timeline from when we incur higher inflation until price increases become effective with our auto customers.
So let's move to the Industrial segment and in our Industrial segment sales increased 13% organically year-over-year. Industrial equipment was up 19% organically with double digit growth in all regions and continued benefits from increased capital spending and factory automation.
In our energy business, we saw 17% organic growth driven by increased penetration in renewable applications. And in our aerospace defense and marine business, this is the first time we've seen year-over-year growth since the market was impacted by COVID. And we now expect continued growth as we go forward.
Our medical sales in the segment were up 1% organically with a modest increase in interventional procedures, as well as medical device market is continuing to work through supply chain challenges. From a segment margin perspective, our adjusted operating margins expanded year-over-year by 100 basis points to 16.8% driven by higher volume and strong operational performance by our team. We have made significant progress in our margin progression over the past several years. And I'm pleased with how the team continues to drive towards its business model target of consistent high teens operating margin.
So let's turn to the Communication segment. And as you can just see, looking at the slide, our team continues to execute, while capitalizing on the growth trends in the markets they serve. Sales growth was 16% organically year-over-year for the segment with growth in both businesses as highlighted on the slide.
In our data and device business, we saw market out performance driven by content growth in high speed cloud, as well as share gains in artificial intelligence applications. And as we highlighted last quarter, these artificial intelligence applications do improve energy efficient in the data center. And it's just another example of how we enable lower carbon emissions with our customers through our engineering.
In our appliance business, it didn't perform ahead of our expectations, despite the expected declines in the China market. We saw growth both in North America and Europe in our appliance business and that is driven by continued share gains enabled by our global manufacturing strategy.
From a margin perspective, the communications team continues to deliver outstanding performance. The adjusted operating margins were 26.2% and this was up 270 basis points versus a strong quarter in the prior year. And our teams continue to deliver strong performance, both on sales as well as proving margin resiliency. So with that as a backdrop of our segment results, let me turn it over to Heath who will get into more details on the financials as well as our expectations going forward.
