TE Connectivity (TEL) to Post Q2 Earnings: What's in Store?
TE Connectivity Ltd. TEL is scheduled to report second-quarter fiscal 2021 results on Apr 21.
For the fiscal second quarter, the company expects net sales of $3.5 billion. The Zacks Consensus Estimate for the same is pegged at $3.51 billion, suggesting growth of 9.9% from the year-ago reported figure.
Further, TE Connectivity expects adjusted earnings of $1.47 per share. The Zacks Consensus Estimate for the same is pegged at $1.48 per share, which indicates growth of 14.7% from the year-ago quarter’s reported figure.
Notably, the company surpassed the Zacks Consensus Estimate in each of the trailing four-quarter, the average surprise being 29.9%.
TE Connectivity Ltd. Price and EPS Surprise
TE Connectivity Ltd. price-eps-surprise | TE Connectivity Ltd. Quote
Factors to Note
The solid execution of TE Connectivity’s strategies, especially cost-reduction and footprint-consolidation initiatives, are expected to have remained key catalysts in the fiscal second quarter.
Further, the company’s global manufacturing strategy is anticipated to have benefited its performance in the to-be-reported quarter.
Furthermore, the improving Transportation segment is expected to get reflected in the company’s fiscal second-quarter results. The growing proliferation of autonomous features is expected to have acted as a tailwind.
Additionally, the increasing production of hybrid and electric vehicles is anticipated to have aided growth in the segment’s sales. Also, solid content growth and rising electronification trend are expected to have contributed well to the fiscal second-quarter performance of the segment.
Furthermore, positive contributions from the First Sensor buyout and solid momentum across auto applications are likely to have benefited the segment in the quarter under review.
Coming to the Communication segment, solid demand for data and devices in cloud applications and data centers, courtesy of increasing work-from-home trend due to the ongoing coronavirus pandemic, is likely to have driven the segment’s growth in the quarter to be reported.
Further, strong momentum across factory-automation applications is expected to have contributed well to the company’s industrial equipment sales growth. This is expected to have benefited the Industrial segment in the fiscal second quarter.
However, the impacts of uncertainties related to the coronavirus pandemic are expected to get reflected in the company’s to-be-reported results. Further, delays in elective procedures due to the ongoing pandemic are anticipated to have impacted the company’s medical sales negatively.
Also, COVID-related headwinds are expected to have been concerning for the company’s energy sales. Additionally, sluggishness in commercial aerospace is likely to have hurt the Industrial segment inthe fiscal second quarter.
What Our Model Says
Our proven model does not conclusively predictan earnings beat for TE Connectivity this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
TE Connectivity has an Earnings ESP of -1.16% and a Zacks Rank #2.
Stocks to Consider
Here are some stocks you may consider, as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.
AMETEK, Inc. AME currently has an Earnings ESP of +0.49% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Alphabet Inc. GOOGL has an Earnings ESP of +5.07% and a Zacks Rank of 3 at present.
Fortive Corporation FTV currently has an Earnings ESP of +1.95% and a Zacks Rank #3.
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