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What's in the Cards for TE Connectivity's (TEL) Q3 Earnings?

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TE Connectivity Ltd. (TEL - Free Report) is scheduled to report third-quarter fiscal 2021 results on Jul 28.

For the fiscal third quarter, the company expects net sales of $3.7 billion. The Zacks Consensus Estimate for the same is pegged at $3.73 billion, suggesting growth of 46.4% from the year-ago reported figure.

TE Connectivity expects adjusted earnings of $1.57 per share. The Zacks Consensus Estimate for the same is pegged at $1.58 per share, which indicates growth of 167.8% 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 24.03%.

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 third-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. Growing traction across high-speed solutions for cloud applications is likely to have been a key catalyst.

Recovery in Asia, especially China, is anticipated to have continued benefiting the segment in the soon-to-be-reported quarter.

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 third quarter. Strength across solar applications is likely to have contributed well to energy sales. These factors are expected to have benefited the Industrial segment of the company in the quarter under discussion.

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

Delays in elective procedures are also expected to have been headwinds for the company’s medical sales in the fiscal third quarter.

What Our Model Says

Our proven model does not 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. 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 -0.39% and a Zacks Rank #3.

Stocks to Consider

Here are somestocks you may consider, as our proven model shows that thesehave the right combination of elements to post an earnings beat this quarter.

CyberArk Software Ltd. (CYBR - Free Report) has an Earnings ESP of +37.93% and a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Carrier Global Corporation (CARR - Free Report) has an Earnings ESP of +1.45% and a Zacks Rank of 2, currently.

Waters Corporation (WAT - Free Report) has an Earnings ESP of +2.71% and a Zacks Rank of 3 at present.