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TE Connectivity & Molex Tie Up for High-Speed Applications
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TE Connectivity Ltd. (TEL - Free Report) has recently inked a Dual Source Alliance (DSA) agreement with leading manufacturer of electrical and fiber optic interconnection systems, Molex, LLC. The technology behemoths are collaborating to develop high-speed input/output (I/O) and backplane connectors, and cable assemblies, to be deployed in data communications applications.
With an ability to support data speeds as high as 56 Gbps and beyond, the DSAs will further focus on increasing the availability of interoperable solutions, comprising connectors, cages and cable assemblies. The scope of the agreement also includes cross-testing of select products to provide product compatibility assurance to customers. This will ultimately help in cost savings for customers, boosting the productivity and efficiency of their systems.
These high-speed applications can cater to the demand of modern day data centers as they continue to embrace hyperscale and increased virtualization models. Data centers have a pressing demand for sophisticated connector and cable assembly designs which can enable high-speed signaling, EMI containment and thermal efficiencies.
The DCA agreement focuses on developing new data storage, servers, switches, routers and other applications that can meet these requirements. In a nutshell, the deal will provide lot of flexibility for customers in the future, by offering them next-generation connector technology. Customers will enjoy increased product availability, thus reducing the risk of new technology adoption.
In the past three months, TE Connectivity has charted impressive growth of 14.8%, more than double the Zacks categorized Electronics-Miscellaneous Components industry average of 6.9%. Also, this Zacks Rank #3 (Hold) stock has a striking earnings surprise history, with an average surprise of 5.6% in the trailing four quarters, beating estimates all through. In the past month, the Zacks Consensus Estimate for fiscal 2017 earnings has inched up from $4.35 to $4.36, on the back of one upward estimate revision versus none lower.
In the coming quarters, we believe that harsh-environment application business will act as a major profit churner, mainly supported by secular trends like increased safety features, autonomous driving systems, higher emission standards and infotainment. The other businesses of the company, namely Industrial and Communications Solutions, are also faring well and TE Connectivity believes that they have ample room for growth, going forward.
The Industrial segment is likely to grow in low-single digits, primarily driven by growth in Commercial Aerospace and Defense business lines and string momentum of interventional medical applications. Further, the communications segment has bright prospects and is anticipated to grow in low-single digits.
The positive industry trends, along with the company’s restructuring actions, are likely to boost the growth of the Zacks Rank #3 (Hold) company, moving ahead. However, this can be restrained to some extent by macro headwinds, like softness in the oil & gas end-market, currency volatility and weak industrial demand.
Littelfuse has an average positive earnings surprise of 3.5%, beating estimates thrice over the trailing four quarters.
Rogers has an excellent earnings surprise history, beating estimates each time in the trailing four quarters. The company has an average earnings surprise of 37.2%.
With three consecutive beats over the trailing four quarters, TTM Technologies has an average earnings surprise of 29.1%.
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TE Connectivity & Molex Tie Up for High-Speed Applications
TE Connectivity Ltd. (TEL - Free Report) has recently inked a Dual Source Alliance (DSA) agreement with leading manufacturer of electrical and fiber optic interconnection systems, Molex, LLC. The technology behemoths are collaborating to develop high-speed input/output (I/O) and backplane connectors, and cable assemblies, to be deployed in data communications applications.
With an ability to support data speeds as high as 56 Gbps and beyond, the DSAs will further focus on increasing the availability of interoperable solutions, comprising connectors, cages and cable assemblies. The scope of the agreement also includes cross-testing of select products to provide product compatibility assurance to customers. This will ultimately help in cost savings for customers, boosting the productivity and efficiency of their systems.
These high-speed applications can cater to the demand of modern day data centers as they continue to embrace hyperscale and increased virtualization models. Data centers have a pressing demand for sophisticated connector and cable assembly designs which can enable high-speed signaling, EMI containment and thermal efficiencies.
The DCA agreement focuses on developing new data storage, servers, switches, routers and other applications that can meet these requirements. In a nutshell, the deal will provide lot of flexibility for customers in the future, by offering them next-generation connector technology. Customers will enjoy increased product availability, thus reducing the risk of new technology adoption.
In the past three months, TE Connectivity has charted impressive growth of 14.8%, more than double the Zacks categorized Electronics-Miscellaneous Components industry average of 6.9%. Also, this Zacks Rank #3 (Hold) stock has a striking earnings surprise history, with an average surprise of 5.6% in the trailing four quarters, beating estimates all through. In the past month, the Zacks Consensus Estimate for fiscal 2017 earnings has inched up from $4.35 to $4.36, on the back of one upward estimate revision versus none lower.
In the coming quarters, we believe that harsh-environment application business will act as a major profit churner, mainly supported by secular trends like increased safety features, autonomous driving systems, higher emission standards and infotainment. The other businesses of the company, namely Industrial and Communications Solutions, are also faring well and TE Connectivity believes that they have ample room for growth, going forward.
The Industrial segment is likely to grow in low-single digits, primarily driven by growth in Commercial Aerospace and Defense business lines and string momentum of interventional medical applications. Further, the communications segment has bright prospects and is anticipated to grow in low-single digits.
The positive industry trends, along with the company’s restructuring actions, are likely to boost the growth of the Zacks Rank #3 (Hold) company, moving ahead. However, this can be restrained to some extent by macro headwinds, like softness in the oil & gas end-market, currency volatility and weak industrial demand.
Stocks to Consider
Some better-ranked stocks in the same space include Littelfuse, Inc. (LFUS - Free Report) , Rogers Corporation (ROG - Free Report) and TTM Technologies, Inc. (TTMI - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Littelfuse has an average positive earnings surprise of 3.5%, beating estimates thrice over the trailing four quarters.
Rogers has an excellent earnings surprise history, beating estimates each time in the trailing four quarters. The company has an average earnings surprise of 37.2%.
With three consecutive beats over the trailing four quarters, TTM Technologies has an average earnings surprise of 29.1%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>