Key Takeaways:
TE Connectivity Ltd. (NYSE: TEL) reported fiscal second-quarter results that topped Wall Street estimates and provided a strong outlook, driven by record orders and growth across its key segments.
"This performance and our record orders were driven by our strategic positioning in key trends, including AI, next-generation transportation, and electric grid modernization, along with the broadening of growth across our portfolio," CEO Terrence Curtin said in a statement.
The electronic components supplier reported adjusted earnings per share of $2.73 on revenue of $4.74 billion. The results compare favorably to analyst expectations for $2.70 in earnings per share on revenue of $4.7 billion.
Shares of TE Connectivity rose 1% in premarket trading following the announcement. For the third quarter, the company expects to deliver double-digit sales growth to $5 billion and adjusted EPS of approximately $2.83, ahead of consensus estimates of $4.9 billion and $2.80, respectively.
Net sales increased 15% on a reported basis and 7% organically year-over-year, with double-digit growth in both the Industrial and Transportation segments. The company also reported record orders of $5.3 billion, an increase of 25% from the prior year, indicating sustained demand for its products.
The Industrial Solutions segment saw a 27% jump in net sales to $2.32 billion, while the Transportation Solutions segment grew 4.7% to $2.42 billion. The company noted strong demand from hyperscaler platforms for artificial intelligence applications, as well as in the energy, aerospace, defense, and marine sectors.
The guidance raise suggests management expects the robust demand for its connectivity and sensor solutions to continue. Investors will be watching the company's ability to maintain its strong margin performance, which saw adjusted operating margins expand 130 basis points year-over-year to 22%.
This article is for informational purposes only and does not constitute investment advice.
