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

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TE Connectivity Ltd. (TEL - Free Report) is scheduled to report second-quarter fiscal 2022 results on Apr 27.

For the fiscal second quarter, the company expects year-over-year net sales growth of 2% and 3% on a reported basis and an organic basis, respectively, to $3.7 billion. The Zacks Consensus Estimate for the same is pegged at $3.81 billion, suggesting growth of 1.85% from the year-ago reported figure.

TE Connectivity expects adjusted earnings of $1.70 per share, reflecting growth of 8% from the year-ago quarter. The Zacks Consensus Estimate for the same is pegged at $1.71 per share, which indicates growth of 8.9% from the year-ago quarter’s reported figure.

Notably, the company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 7.79%.

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 Note

The solid execution of TE Connectivity’s strategies, especially cost-reduction and footprint-consolidation initiatives, are expected to have been the key catalysts in the fiscal second quarter.

The company’s global manufacturing strategy is anticipated to have benefited its performance in the to-be-reported quarter.

The impacts of the improving Transportation segment are 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.

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.

Coming to the Communication segment, the solid demand for data and devices in cloud applications and data centers, courtesy of the increasing work-from-home trend due to the coronavirus pandemic, is likely to have driven the segment’s growth in the quarter to be reported.

Strong momentum across factory-automation applications is expected to have contributed well to the company’s industrial equipment’s sales growth.

Solid momentum across renewable applications and ongoing digitization is likely to have been another tailwind.

All these factors are 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 quarter’s results. Additionally, sluggishness in commercial aerospace is likely to have been an overhang.

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. 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 -1.00% and a Zacks Rank #3.

Stocks to Consider

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

Analog Devices (ADI - Free Report) has an Earnings ESP of +2.17% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Analog Devices is scheduled to release second-quarter fiscal 2022 results on May 18. The Zacks Consensus Estimate for ADI’s earnings is pegged at $2.12 per share, suggesting an increase of 37.7% from the prior-year reported figure.

Cisco Systems (CSCO - Free Report) has an Earnings ESP of +0.84% and a Zacks Rank #2 at present.

Cisco Systems is set to report third-quarter fiscal 2022 results on May 18. The Zacks Consensus Estimate for CSCO’s earnings is pegged at 86 cents per share, which suggests an increase of 3.61% from the prior-year reported figure.

HP (HPQ - Free Report) has an Earnings ESP of +0.78% and a Zacks Rank #3 at present.

HP is scheduled to release second-quarter fiscal 2022 results on May 26. The Zacks Consensus Estimate for HPQ’s earnings is pegged at $1.06 per share, which suggests an increase of 13.98% from the prior-year reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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