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

TE Connectivity Ltd. TEL is set to report fiscal second-quarter 2019 results on Apr 24.

The company surpassed the Zacks Consensus Estimate in the trailing four quarters, delivering average positive earnings surprise of 2.97%.

TE Connectivity, which came up with adjusted earnings of $1.29 per share, delivered a positive surprise of 1.57% in the last reported quarter.

For the fiscal second quarter, the company expects adjusted earnings in the band of $1.13-$1.17 per share. The Zacks Consensus Estimate for earnings is pegged at $1.27 per share.

The company anticipates net sales in the range of $3.3-$3.4 billion, indicating a decline of 6% at the mid-point. The Zacks Consensus Estimate for the same is pegged at $3.36 billion.

The dismal guidance is due to weak market conditions in China and softness in European Auto.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

The company is witnessing normalizing seasonal trends in business, which remains a major positive. Markets like commercial transportation, factory automation and appliances are expected to continue normalizing. This is likely to benefit the company’s to-be-reported quarter results.

In Transportation solutions, it is anticipated to witness organic growth in low single-digits, owing to global decline in auto production, primarily in Europe and China.

Further, the Industrial Solutions segment is poised to grow in low-single digits, with growth in aerospace, defense and medical, partially offset by weakness in factory automation applications.

Moreover, Communications Solutions segment is expected to grow in low-single digits. The decline will be primarily due to weakness in Asian markets for data, devices unit and appliances.

Also, currency fluctuations remain a concern.

Nevertheless, the company’s strengthening global position is expected to benefit the appliance business. Further, sale of SubCom business is helping it to reduce volatility in the product portfolio.

These factors are anticipated to aid the company’s results in the to-be-reported quarter.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 or 5 (Sell rated) stocks are best avoided. 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 0.00% and carries a Zacks Rank #3, which makes surprise prediction difficult.

TE Connectivity Ltd. Price and EPS Surprise

 

TE Connectivity Ltd. Price and EPS Surprise | TE Connectivity Ltd. Quote

Stocks That Warrant a Look

You may consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank.

Xilinx, Inc. XLNX has an Earnings ESP of +1.75% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Verizon Communications Inc. VZ has an Earnings ESP of +0.02% and a Zacks Rank #3.

Waters Corporation WAT has an Earnings ESP of +1.23% and holds a Zacks Rank #3.

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