Key Takeaways
- Third-quarter adjusted earnings per share reached $2.94, surpassing the $2.84 consensus estimate; sales climbed 14% to $5.16 billion
- Fourth-quarter outlook exceeds expectations: EPS forecast at $3.05 versus $2.96 analyst estimate, revenue projected around $5.25 billion versus $5.16 billion consensus
- Company announces $1.4 billion acquisition of Astrodyne TDI, with transaction expected to finalize by late 2026
- Year-to-date order growth of 70% creates substantial backlog extending into 2026
- Shares declined over 5% during premarket session despite beating earnings expectations
TE Connectivity (TEL) delivered third-quarter adjusted earnings of $2.94 per share on Wednesday, exceeding analyst projections of $2.84. Despite the positive results, the stock opened at $209.02 and experienced a premarket decline exceeding 5%.
Sales for the period concluding June 26 reached $5.16 billion, representing a 14% increase compared to the prior year. Wall Street had anticipated $5 billion. The company’s industrial and transportation divisions fueled this expansion.
Looking ahead to the fourth quarter, TE projected adjusted earnings per share of $3.05, surpassing the $2.96 consensus forecast. The company’s revenue outlook of roughly $5.25 billion also exceeded Wall Street’s $5.16 billion projection.
Chief Executive Officer Terrence Curtin highlighted that order volume has surged 70% year-to-date, establishing a robust backlog that extends into 2026.
TE Connectivity Announces Astrodyne TDI Acquisition
Alongside its quarterly results, TE revealed plans to purchase Astrodyne TDI, a manufacturer of power management and filtering solutions, for $1.4 billion. The transaction is anticipated to conclude by year-end 2026.
This strategic acquisition reinforces TE’s expansion in power management, a sector experiencing heightened demand linked to data center expansion fueled by artificial intelligence computing requirements.
TE manufactures electrical connector systems utilized in data center infrastructure. The increasing need for AI-related tools has accelerated global investments in network infrastructure, creating favorable conditions for the company.
Tariff Impact and Pricing Approach
Curtin directly addressed tariff-related matters during the earnings call. He confirmed that TE has submitted applications for refunds through President Trump’s tariff relief program but has not yet recovered substantial amounts.
He clarified that any refunds obtained would be passed along to customers instead of being applied toward widespread price reductions.
Regarding raw material expenses, Curtin indicated that TE will maintain its strategy of transferring increased costs to customers through pricing adjustments to safeguard profit margins. Oil-derived materials such as resins continue to face elevated prices due to escalating tensions between the United States and Iran.
The company maintains a debt-to-equity ratio of 0.42, a current ratio of 1.89, and trades within a 52-week range spanning $177.21 to $252.56.
TE announced a quarterly dividend of $0.78 per share, scheduled for payment on September 11, with August 21 as the record date. This translates to an annualized dividend of $3.12, yielding approximately 1.5%.
Among Wall Street analysts, Barclays maintains a $300 price objective with an overweight recommendation. Citigroup holds a buy rating with a $230 target. The consensus price target among analysts stands at $255.31, with an overall rating of Moderate Buy.
Institutional investors control 91.43% of outstanding shares. Mediolanum International Funds recently established a new position valued at approximately $2.7 million.
On the insider activity front, Shadrak W. Kroeger divested 9,400 shares on June 1 at $215.00 each, decreasing his holdings by 26.57% through a predetermined 10b5-1 trading plan.
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