Yahoo Finance Should You Buy TE Connectivity (TEL) Ahead of Q2 Earnings?
TE Connectivity Ltd TEL is scheduled to report its second-quarter fiscal 2024 results on Apr 24.
TE Connectivity is the market leader in the connectivity and sensor business, armed with a comprehensive portfolio. It has been benefiting from the well-performing transportation solutions segment. The growing proliferation of EVs and strong content trends in electronification are driving automotive sales.
Global auto production is expected to grow slightly this year, driven by strong China production and EV adoption. However, sluggishness in Europe and in North America has been a headwind.
Improvements in commercial aerospace and solid momentum across renewable energy across both solar and wind applications are expected to have benefited the performance of industrial solutions. Additionally, growing momentum across interventional procedures is aiding medical sales.
TE Connectivity expects strong margin expansion driven by robust performance from its Transportation and Communication segments.
However, declining sensor sales due to portfolio optimization activities have been a headwind. Further, sluggish commercial transportation and data and device sales have been major headwinds.
For the to-be-reported quarter, TE Connectivity expects net sales of $3.85 billion, flat on both a reported and organic basis year over year. Sequentially, net sales are expected to increase 3%, driven by the Industrial segment, while Transportation sales are expected to decline slightly.
TE Connectivity Ltd. Price and EPS Surprise
TE Connectivity Ltd. price-eps-surprise | TE Connectivity Ltd. Quote
Adjusted earnings are projected at $1.82 per share, indicating growth of more than 10% year over year. Adjusted operating margin is expected to expand roughly 200 basis points year-over-year.
Earnings Estimates Show Upward Trajectory
The Zacks Consensus Estimate for fiscal second-quarter earnings has increased by a penny to $1.83 per share over the past 30 days, suggesting year-over-year growth of 10.91%.
TE Connectivity beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average surprise being 4.96%.
The consensus mark for revenues is pegged at $3.96 billion, suggesting a decline of 4.8% year over year.
Our model estimate for the Transportation segment sales is pegged at $2.41 billion, suggesting a 3% decrease year over year.
Our model estimate for Industrial solutions sales is pegged at $1.14 billion, indicating a 4.7% year-over-year decline.
Our model estimate for Communication segment sales is pegged at $407.7 million, indicating a decline of 16.1% from the year-ago quarter’s reported figure.
What Our Model Says
Per the Zacks model, 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. That’s the exact case here.
TE Connectivity currently has an Earnings ESP of +0.91% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are a few other companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings in their upcoming releases:
Vertiv VRT has an Earnings ESP of +1.24% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Vertiv shares have gained 56.1% year to date. VRT is set to report its first-quarter 2024 results on Apr 24.
Meta Platforms META has an Earnings ESP of +0.62% and a Zacks Rank #2 at present.
Meta shares have gained 35.9% year to date. META is set to report its first-quarter 2024 results on Apr 24.
Itron ITRI has an Earnings ESP of +5.88% and has a Zacks Rank of 2 at present.
Itron shares have gained 18.7% year to date. ITRI is set to report its first-quarter 2024 results on May 2.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Itron, Inc. (ITRI) : Free Stock Analysis Report
TE Connectivity Ltd. (TEL) : Free Stock Analysis Report
Vertiv Holdings Co. (VRT) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
