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TE Connectivity Stock Rises on Q3 Earnings Beat, Revenues Up Y/Y
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Key Takeaways
TE Connectivity posted Q3 earnings of $2.27 per share, up 18.8% year over year.
TEL's net sales rose 14% to $4.53B, driven by the Industrial segment's growth of 30%.
TEL shares gained 14.13% pre-market as cash flow hit $1.2B and orders grew 6%.
TE Connectivity (TEL - Free Report) reported third-quarter fiscal 2025 adjusted earnings of $2.27 per share, which increased 18.8% from the year-ago quarter and beat the Zacks Consensus Estimate by 9.13%.
Net sales totaled $4.53 billion, beating the consensus estimate by 5.2%, which increased 14% reported and 9% organically year over year. Sales were favorably impacted by growth in the Industrial segment.
Orders of $4.5 billion increased 6% both year over year and sequentially.
Following the release, TEL shares rose 14.13% in the pre-market trading, driven by strong operational performance and records in sales and cash flow. Year to date, shares of the company have climbed 26.2%, outpacing the Zacks Computer and Technology sector’s 9.8% return.
TE Connectivity Ltd. Price, Consensus and EPS Surprise
The Transportation solutions segment generated revenues of $2.42 billion, contributing 53.3% to net sales. The figure increased 2.8% year over year on a reported basis and 1.1% organically.
Automotive sales increased 3.3% year over year, including 1.5% organic growth, supported by strong content-driven demand in Asia.
Sensor sales fell 1.7% year over year, reflecting soft demand across Western end markets.
Commercial transportation sales rose 3.9% year over year, driven primarily by growth in Asia and Europe.
The Industrial Solutions segment generated revenues of $2.12 billion, making up 46.7% of net sales. This represented a 30% increase year over year on a reported basis and 20.5% growth organically.
Digital Data Networks, Automation & Connected Living, Aerospace, Defense and Marine, and Energy saw year-over-year growth of 84.2%, 10%, 8.4% and 69.9%, respectively. However, Medical experienced a decline of 13.4%.
TEL’s Q3 Operating Details
In third-quarter fiscal 2025, GAAP gross margin expanded 50 basis points (bps) year over year to 35.3%.
Selling, general and administrative expenses held flat at 10.8% of net sales, unchanged year over year.
Research, development and engineering expenses, as a percentage of net sales, contracted 10 bps to 4.7%.
Adjusted operating margin expanded 60 bps year over year to 19.9% in the reported quarter.
TEL’s Balance Sheet & Cash Flow
As of June 27, 2025, cash and cash equivalents were $0.67 billion, down from $2.55 billion as of March 28, 2025.
Long-term debt was $4.85 billion as of June 27, 2025, compared with $3.26 billion as of March 28, 2025.
TE Connectivity generated $1.2 billion in cash from operations in the reported quarter, up from the previous quarter's figure of $0.7 billion.
TEL generated a free cash flow of $962 million in the third quarter, up from $424 million reported in the previous quarter.
TE Connectivity’s Positive Q4 Guidance
TE Connectivity expects fiscal fourth-quarter net sales to increase 12% year over year to $4.55 billion. Adjusted earnings are projected to be $2.27 per share, indicating growth of 16% year over year.
The Zacks Consensus Estimate for fourth-quarter fiscal 2025’s sales is pegged at $4.38 billion, suggesting 7.68% growth over the figure reported in the year-ago quarter. The consensus mark for earnings is pegged at $2.13 per share, up by a penny over the past 30 days and indicates 9.23% growth over the figure reported in the year-ago quarter.
TEL’s Zacks Rank & Other Stocks to Consider
Currently, TE Connectivity has a Zacks Rank #2 (Buy).
CommVault Systems (CVLT - Free Report) , Microchip Technology (MCHP - Free Report) and KLA Corporation (KLAC - Free Report) are some other stocks that investors can consider in the broader Zacks Computer and Technology sector. While CommVault Systems and Microchip Technology currently sport a Zacks Rank #1 (Strong Buy) each, KLA Corp carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
CommVault Systems shares have gained 10.6% year to date. CVLT is set to report its first-quarter fiscal 2026 results on July 29.
Microchip Technology shares have appreciated 31.2% year to date. MCHP is set to report its first-quarter fiscal 2026 results on Aug. 7.
KLA Corp shares have jumped 41.6% year to date. KLAC is set to report its fourth-quarter fiscal 2025 results on July 31.
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TE Connectivity Stock Rises on Q3 Earnings Beat, Revenues Up Y/Y
Key Takeaways
TE Connectivity (TEL - Free Report) reported third-quarter fiscal 2025 adjusted earnings of $2.27 per share, which increased 18.8% from the year-ago quarter and beat the Zacks Consensus Estimate by 9.13%.
Net sales totaled $4.53 billion, beating the consensus estimate by 5.2%, which increased 14% reported and 9% organically year over year. Sales were favorably impacted by growth in the Industrial segment.
Orders of $4.5 billion increased 6% both year over year and sequentially.
Following the release, TEL shares rose 14.13% in the pre-market trading, driven by strong operational performance and records in sales and cash flow. Year to date, shares of the company have climbed 26.2%, outpacing the Zacks Computer and Technology sector’s 9.8% return.
TE Connectivity Ltd. Price, Consensus and EPS Surprise
TE Connectivity Ltd. price-consensus-eps-surprise-chart | TE Connectivity Ltd. Quote
TEL’s Q3 Top-Line Details
The Transportation solutions segment generated revenues of $2.42 billion, contributing 53.3% to net sales. The figure increased 2.8% year over year on a reported basis and 1.1% organically.
Automotive sales increased 3.3% year over year, including 1.5% organic growth, supported by strong content-driven demand in Asia.
Sensor sales fell 1.7% year over year, reflecting soft demand across Western end markets.
Commercial transportation sales rose 3.9% year over year, driven primarily by growth in Asia and Europe.
The Industrial Solutions segment generated revenues of $2.12 billion, making up 46.7% of net sales. This represented a 30% increase year over year on a reported basis and 20.5% growth organically.
Digital Data Networks, Automation & Connected Living, Aerospace, Defense and Marine, and Energy saw year-over-year growth of 84.2%, 10%, 8.4% and 69.9%, respectively. However, Medical experienced a decline of 13.4%.
TEL’s Q3 Operating Details
In third-quarter fiscal 2025, GAAP gross margin expanded 50 basis points (bps) year over year to 35.3%.
Selling, general and administrative expenses held flat at 10.8% of net sales, unchanged year over year.
Research, development and engineering expenses, as a percentage of net sales, contracted 10 bps to 4.7%.
Adjusted operating margin expanded 60 bps year over year to 19.9% in the reported quarter.
TEL’s Balance Sheet & Cash Flow
As of June 27, 2025, cash and cash equivalents were $0.67 billion, down from $2.55 billion as of March 28, 2025.
Long-term debt was $4.85 billion as of June 27, 2025, compared with $3.26 billion as of March 28, 2025.
TE Connectivity generated $1.2 billion in cash from operations in the reported quarter, up from the previous quarter's figure of $0.7 billion.
TEL generated a free cash flow of $962 million in the third quarter, up from $424 million reported in the previous quarter.
TE Connectivity’s Positive Q4 Guidance
TE Connectivity expects fiscal fourth-quarter net sales to increase 12% year over year to $4.55 billion. Adjusted earnings are projected to be $2.27 per share, indicating growth of 16% year over year.
The Zacks Consensus Estimate for fourth-quarter fiscal 2025’s sales is pegged at $4.38 billion, suggesting 7.68% growth over the figure reported in the year-ago quarter. The consensus mark for earnings is pegged at $2.13 per share, up by a penny over the past 30 days and indicates 9.23% growth over the figure reported in the year-ago quarter.
TEL’s Zacks Rank & Other Stocks to Consider
Currently, TE Connectivity has a Zacks Rank #2 (Buy).
CommVault Systems (CVLT - Free Report) , Microchip Technology (MCHP - Free Report) and KLA Corporation (KLAC - Free Report) are some other stocks that investors can consider in the broader Zacks Computer and Technology sector. While CommVault Systems and Microchip Technology currently sport a Zacks Rank #1 (Strong Buy) each, KLA Corp carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
CommVault Systems shares have gained 10.6% year to date. CVLT is set to report its first-quarter fiscal 2026 results on July 29.
Microchip Technology shares have appreciated 31.2% year to date. MCHP is set to report its first-quarter fiscal 2026 results on Aug. 7.
KLA Corp shares have jumped 41.6% year to date. KLAC is set to report its fourth-quarter fiscal 2025 results on July 31.