U.S. Markets open in 3 hrs 19 mins
  • S&P Futures

    3,399.25
    +5.75 (+0.17%)
     
  • Dow Futures

    27,598.00
    +17.00 (+0.06%)
     
  • Nasdaq Futures

    11,527.50
    +35.25 (+0.31%)
     
  • Russell 2000 Futures

    1,600.90
    -1.20 (-0.07%)
     
  • Crude Oil

    38.84
    +0.28 (+0.73%)
     
  • Gold

    1,901.80
    -3.90 (-0.20%)
     
  • Silver

    24.41
    -0.01 (-0.04%)
     
  • EUR/USD

    1.1812
    -0.0001 (-0.0118%)
     
  • 10-Yr Bond

    0.8010
    0.0000 (0.00%)
     
  • Vix

    32.66
    +5.11 (+18.55%)
     
  • GBP/USD

    1.3024
    +0.0003 (+0.0261%)
     
  • USD/JPY

    104.6300
    -0.2050 (-0.1955%)
     
  • BTC-USD

    13,142.47
    +32.93 (+0.25%)
     
  • CMC Crypto 200

    261.45
    -1.97 (-0.75%)
     
  • FTSE 100

    5,774.50
    -17.51 (-0.30%)
     
  • Nikkei 225

    23,485.80
    -8.54 (-0.04%)
     

TE Connectivity (TEL) to Report Q2 Earnings: What's in Store?

Zacks Equity Research
·4 mins read

TE Connectivity Ltd. TEL is scheduled to report second-quarter fiscal 2020 results on Apr 28.

For the fiscal second quarter, the company anticipates net sales in the range of $3.1 billion to $3.3 billion. The Zacks Consensus Estimate for revenues is pegged at $2.96 billion, indicating a decline of 13.3% from the prior-year quarter.

Adjusted earnings per share are projected in the band of $1.22-$1.28 for the fiscal second quarter. The consensus mark for earnings stands at $1.05 per share, suggesting a decline of 26.1% from the year-ago reported figure.

Notably, it has trailing four-quarter positive earnings surprise of 6.28%, on average.

TE Connectivity Ltd. Price and EPS Surprise

TE Connectivity Ltd. Price and EPS Surprise
TE Connectivity Ltd. Price and EPS Surprise

TE Connectivity Ltd. price-eps-surprise | TE Connectivity Ltd. Quote

Factors to Consider

Despite challenging market conditions, the company’s strong focus on content growth across its businesses is expected to have driven the fiscal second-quarter performance.

Further, the company’s footprint consolidation plans and stringent cost cutting strategies are expected to get reflected in the results of the quarter to be reported.

Additionally, TE Connectivity’s constant capital deployment in a bid to expand product portfolio remains a positive.

During the fiscal second quarter, the company completed the buyout of First Sensor, a provider of sensor technology. The acquisition is expected to have benefited the sensor business of the company during the quarter under review.

Notably, content growth and new programs in defense and commercial airspace are expected to have driven growth in the aerospace, defense and marine business in the to-be-reported quarter.

Further, growing momentum across interventional applications is expected to have driven growth in the medical business. Also, the company’s energy business is likely to have gained from strong investments in the renewable energies.

All these are likely to have driven the company’s industrial solutions segment’s sales in the to-be-reported quarter despite weak momentum across factory automation applications and inventory stocking in the distribution channel, which are expected to have impacted the industrial equipment business negatively.

Coming to transportation segment, continuous content growth in the electric vehicle and automation features of vehicles are anticipated to have benefited the segment during the quarter under review.

However, slowdown in the global auto production and softness in the commercial transportation market are likely to have weighed on the transportation solutions fiscal second-quarter sales.

Further, weak momentum across data and devices applications are expected to have impacted the communications solutions segment negatively during the fiscal second quarter.

Additionally, foreign exchange headwinds and ongoing inventory destocking in the supply chain are expected to get reflected in the company’s fiscal second-quarter results.

What Our Model Says

Our proven model doesn’t conclusively predict an 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. But that’s not the case here. 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 -0.96% and a Zacks Rank #3.

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.

Pixelworks, Inc. PXLW has an Earnings ESP of +5.26% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Baidu, Inc. BIDU has an Earnings ESP of +10.09% and a Zacks Rank of 2.

Etsy, Inc. ETSY has an Earnings ESP of +8.17% and a Zacks Rank #2.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Baidu, Inc. (BIDU) : Free Stock Analysis Report
 
TE Connectivity Ltd. (TEL) : Free Stock Analysis Report
 
Pixelworks, Inc. (PXLW) : Free Stock Analysis Report
 
Etsy, Inc. (ETSY) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research