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TE Connectivity Q3 Earnings Beat Estimates, Revenues Increase Y/Y
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Key Takeaways
TEL beat Q3 earnings and revenue estimates as sales rose 14% and orders hit a record $5.7 billion.
TEL expects about $5.25B in Q4 sales and adjusted EPS of about $3.05, with 11% sales growth.
TEL agreed to acquire Astrodyne TDI for $1.4B to expand its Industrial Solutions power portfolio.
TE Connectivity (TEL - Free Report) reported third-quarter fiscal 2026 adjusted earnings of $2.94 per share, up 22% year over year. The figure beat the Zacks Consensus Estimate of $2.85 by 3.2%.
Net sales increased 14% year over year to $5.16 billion and surpassed the Zacks Consensus estimate by 3.14%. Growth across both the Industrial and Transportation segments supported performance. Orders reached a record $5.7 billion, rising 27% year over year.
TEL's Q3 Top-Line Details
Transportation Solutions generated revenues of $2.58 billion, accounting for half of total sales. Segment revenues increased 7% on a reported basis and 5% organically from the year-ago quarter.
Industrial Solutions also recorded revenues of $2.58 billion, representing the remaining half of sales. The figure climbed 22% year over year on a reported basis and 21% organically, reflecting broad-based demand across most of its businesses.
TE Connectivity Ltd. Price, Consensus and EPS Surprise
Within Transportation Solutions, Automotive sales rose 5% to $1.91 billion, including 3% organic growth, supported by content outperformance in Asia and Europe. Commercial Transportation revenues advanced 20% to $434 million and increased 18% organically on strong content growth across all regions.
Sensor’s revenues declined 1% to $233 million and fell 3% organically. The segment's adjusted operating income increased to $541 million from $486 million, while adjusted operating margin expanded 90 basis points to 21%.
TEL's Industrial Businesses Maintain Momentum
Digital Data Networks revenues surged 34% to $813 million on both a reported and organic basis, aided by continued momentum in artificial intelligence applications. Management indicated that orders support another strong sequential sales increase for the business in the fourth quarter.
Energy sales increased 34% to $516 million, including 33% organic growth, driven by grid-hardening activity and data-center construction. Automation and Connected Living revenues rose 16% to $664 million, while Aerospace, Defense and Marine sales advanced 12% to $419 million. Medical revenues decreased 7% to $168 million. The segment's adjusted operating income increased to $588 million from $467 million, while adjusted operating margin expanded 70 basis points to 22.8%.
TE Connectivity's Q3 Operating Details
In third-quarter fiscal 2026, GAAP gross margin expanded 26 basis points (bps) year over year to 35.6%.
Selling, general and administrative expenses increased to $532 million from $491 million. Research, development and engineering expenses rose to $230 million from $211 million.
GAAP operating income increased to $981 million from $857 million. Operating margin edged up 10 bps to 19%. Adjusted operating income rose to $1.13 billion from $953 million, while adjusted operating margin expanded 90 bps to 21.9%.
TEL's Cash Flow and Balance Sheet
As of June 26, 2026, cash and cash equivalents totaled $1.24 billion. Total debt was $5.63 billion.
TE Connectivity generated $1.19 billion in cash from operating activities during the quarter, nearly unchanged from the prior-year period. Free cash flow declined to $883 million from $962 million.
TEL repurchased $529 million of shares and paid $226 million in dividends during the quarter.
TE Connectivity's Positive Q4 Guidance
For the fourth quarter of fiscal 2026, TE Connectivity expects sales of approximately $5.25 billion, indicating 11% growth on both a reported and organic basis. Adjusted earnings are projected to be approximately $3.05 per share, representing an 18% year-over-year increase.
TEL also agreed to acquire Astrodyne TDI for approximately $1.4 billion. The business is expected to contribute annual sales of more than $250 million and expand the company's power-management portfolio within Industrial Solutions.
TEL’s Zacks Rank & Other Stocks to Consider
Currently, TE Connectivity has a Zacks Rank #2 (Buy).
View the Zacks #1 Rank List
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TE Connectivity Q3 Earnings Beat Estimates, Revenues Increase Y/Y
Key Takeaways
TE Connectivity (TEL - Free Report) reported third-quarter fiscal 2026 adjusted earnings of $2.94 per share, up 22% year over year. The figure beat the Zacks Consensus Estimate of $2.85 by 3.2%.
Net sales increased 14% year over year to $5.16 billion and surpassed the Zacks Consensus estimate by 3.14%. Growth across both the Industrial and Transportation segments supported performance. Orders reached a record $5.7 billion, rising 27% year over year.
TEL's Q3 Top-Line Details
Transportation Solutions generated revenues of $2.58 billion, accounting for half of total sales. Segment revenues increased 7% on a reported basis and 5% organically from the year-ago quarter.
Industrial Solutions also recorded revenues of $2.58 billion, representing the remaining half of sales. The figure climbed 22% year over year on a reported basis and 21% organically, reflecting broad-based demand across most of its businesses.
TE Connectivity Ltd. Price, Consensus and EPS Surprise
TE Connectivity Ltd. price-consensus-eps-surprise-chart | TE Connectivity Ltd. Quote
TE Connectivity's Segment Performance
Within Transportation Solutions, Automotive sales rose 5% to $1.91 billion, including 3% organic growth, supported by content outperformance in Asia and Europe. Commercial Transportation revenues advanced 20% to $434 million and increased 18% organically on strong content growth across all regions.
Sensor’s revenues declined 1% to $233 million and fell 3% organically. The segment's adjusted operating income increased to $541 million from $486 million, while adjusted operating margin expanded 90 basis points to 21%.
TEL's Industrial Businesses Maintain Momentum
Digital Data Networks revenues surged 34% to $813 million on both a reported and organic basis, aided by continued momentum in artificial intelligence applications. Management indicated that orders support another strong sequential sales increase for the business in the fourth quarter.
Energy sales increased 34% to $516 million, including 33% organic growth, driven by grid-hardening activity and data-center construction. Automation and Connected Living revenues rose 16% to $664 million, while Aerospace, Defense and Marine sales advanced 12% to $419 million. Medical revenues decreased 7% to $168 million. The segment's adjusted operating income increased to $588 million from $467 million, while adjusted operating margin expanded 70 basis points to 22.8%.
TE Connectivity's Q3 Operating Details
In third-quarter fiscal 2026, GAAP gross margin expanded 26 basis points (bps) year over year to 35.6%.
Selling, general and administrative expenses increased to $532 million from $491 million. Research, development and engineering expenses rose to $230 million from $211 million.
GAAP operating income increased to $981 million from $857 million. Operating margin edged up 10 bps to 19%. Adjusted operating income rose to $1.13 billion from $953 million, while adjusted operating margin expanded 90 bps to 21.9%.
TEL's Cash Flow and Balance Sheet
As of June 26, 2026, cash and cash equivalents totaled $1.24 billion. Total debt was $5.63 billion.
TE Connectivity generated $1.19 billion in cash from operating activities during the quarter, nearly unchanged from the prior-year period. Free cash flow declined to $883 million from $962 million.
TEL repurchased $529 million of shares and paid $226 million in dividends during the quarter.
TE Connectivity's Positive Q4 Guidance
For the fourth quarter of fiscal 2026, TE Connectivity expects sales of approximately $5.25 billion, indicating 11% growth on both a reported and organic basis. Adjusted earnings are projected to be approximately $3.05 per share, representing an 18% year-over-year increase.
TEL also agreed to acquire Astrodyne TDI for approximately $1.4 billion. The business is expected to contribute annual sales of more than $250 million and expand the company's power-management portfolio within Industrial Solutions.
TEL’s Zacks Rank & Other Stocks to Consider
Currently, TE Connectivity has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Bandwidth (BAND - Free Report) , Amphenol (APH - Free Report) , and Amkor Technology (AMKR - Free Report) . While Bandwidth and Amphenol sport a Zacks Rank #1 (Strong Buy), Amkor Technology carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bandwidth is set to report second-quarter 2026 results on July 29. Bandwidth shares have appreciated 355.4% year to date.
Amphenol is slated to report second-quarter 2026 results on July 29. Amphenol shares have gained 16.8% year to date.
Amkor Technology is set to report second-quarter 2026 results on July 29. Amkor Technology shares have surged 69% year to date.