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What's in the Cards for TE Connectivity's (TEL) Q1 Earnings?

Zacks Equity Research
·4-min read

TE Connectivity Ltd. TEL is scheduled to report first-quarter fiscal 2022 results on Jan 26.

For the fiscal first quarter, the company expects net sales to grow 5% and 4% year over year on a reported basis and an organic basis, respectively, to $3.7 billion. The Zacks Consensus Estimate for the same is pegged at $3.73 billion, suggesting growth of 5.9% from the year-ago reported figure.

TE Connectivity expects adjusted earnings of $1.60 per share, suggesting growth of 9% from the year-ago quarter’s reported number. The Zacks Consensus Estimate for the same is pegged at $1.62 per share, which indicates growth of 10.2% from the year-ago quarter’s reported figure.

Notably, the company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the surprise being 9.12%, 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

Key Factors to Note

The impacts of TE Connectivity’s footprint consolidation plans and stringent cost-cutting strategies are expected to get reflected in the fiscal first-quarter results.

Recovering overall auto production, along with the increasing production of hybrid and electric vehicles, is likely to have contributed well to sales growth of the company’s Transportation segment in the to-be-reported quarter.

Solid content growth is expected to have driven commercial transportation sales growth in the quarter under review. Positive contributions from the First Sensor buyout are expected to have benefited the sensor business.

In the Communication segment, strengthening momentum across data and devices, as well as appliances, is anticipated to have acted as a tailwind in the quarter under review. The growing traction across high-speed solutions for cloud applications is likely to have been another key catalyst.

In addition to this, strong momentum across factory automation applications is expected to have driven growth in the company’s industrial equipment sales in the fiscal first quarter. Strength across solar applications is likely to have contributed well to energy sales. These factors are expected to have benefited the company’s Industrial segment in the quarter under discussion.

All the above-mentioned factors are likely to have benefited TE Connectivity’s top line in the fiscal first quarter.

However, the impacts of sluggishness in commercial aerospace and uncertainties related to the coronavirus pandemic are expected to get reflected in the to-be-reported quarterly results.

What Our Model Says

Our proven model conclusively predicts 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. 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 +3.32% and a Zacks Rank #3.

Other Stocks to Consider

Here are some other stocks that you may also consider, as our model shows that these too have the right combination of elements to beat on earnings this season.

Alphabet GOOGL has an Earnings ESP of +7.33% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alphabet is scheduled to release the fourth-quarter 2021 results on Feb 1. The Zacks Consensus Estimate for GOOGL’s earnings is pegged at $26.69 per share, which suggests an increase of 19.69% from the prior-year reported figure.

Endava DAVA has an Earnings ESP of +1.70% and a Zacks Rank of 2 at present.

Endava is scheduled to release the second-quarter fiscal 2022 results on Feb 16. The Zacks Consensus Estimate for DAVA’s earnings is pegged at 59 cents per share, suggesting an increase of 55.26% from the prior-year reported figure.

Monolithic Power Systems MPWR has an Earnings ESP of +2.83% and a Zacks Rank #2 at present.

Monolithic Power Systems is set to report the fourth-quarter 2021 results on Feb 10. The Zacks Consensus Estimate for MPWR’s earnings is pegged at $1.87 per share, which suggests an increase of 42.75% from the prior-year reported figure.


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