Company Reports

TE Connectivity's good fiscal third-quarter results came in above guidance, with broad-based demand across end markets and strong AI growth. Sales rose 14% year over year to $5.2 billion. Profitability also expanded, with a non-GAAP operating margin of 21.9%, up 200 basis points year over year.

We see TE Connectivity as a technology leader in connectors, with a wide-ranging portfolio of sticky custom and semicustom components. TE has maintained a leading share of the global connector market for the last decade, specifically dominating the automotive connector market, from which it derives almost half its revenue. While the firm’s entire business benefits from trends toward efficiency and connectivity, these are especially notable in cars, where shifts toward electric and autonomous vehicles provide lucrative opportunities for TE to sell into new vehicle sockets, like an onboard charger or advanced driver-assist system.

We see TE Connectivity as a technology leader in connectors, with a wide-ranging portfolio of sticky custom and semi-custom components. TE has maintained a leading share of the global connector market for the last decade, specifically dominating the automotive connector market, from which it derives almost half of its revenue. While the firm’s entire business benefits from trends toward efficiency and connectivity, these are especially notable in cars, where shifts toward electric and autonomous vehicles provide lucrative opportunities for TE to sell into new vehicle sockets, like an onboard charger or advanced driver-assist system.

TE Connectivity's March-quarter sales rose 15% to $4.7 billion, and management guided to $5 billion in June-quarter sales. Shares sold off 10% intraday, likely over concerns about the trajectory of AI growth, as data center revenue was flat sequentially for the second straight quarter.

We see TE Connectivity as a technology leader in connectors, with a wide-ranging portfolio of sticky custom and semi-custom components. TE has maintained a leading share of the global connector market for the last decade, specifically dominating the automotive connector market, from which it derives almost half of its revenue. While the firm’s entire business benefits from trends toward efficiency and connectivity, these are especially notable in cars, where shifts toward electric and autonomous vehicles provide lucrative opportunities for TE to sell into new vehicle sockets, like an onboard charger or advanced driver-assist system.

TE Connectivity reported positive December-quarter results above guidance, with sales rising 22% year over year to $4.67 billion and non-GAAP operating margin rising 280 basis points year over year to 22.2%. March-quarter guidance implies roughly flat sales and profitability from December.

TE Connectivity held its 2025 investor day, with an emphasis on higher growth and diversification across end markets. Management is targeting 6% to 8% growth through 2030, 30% incremental operating margins on new revenue, and one-third of free cash flow to fund its dividend.

We see TE Connectivity as a technology leader in connectors, with a wide-ranging portfolio of sticky custom and semi-custom components. TE has maintained a leading share of the global connector market for the last decade, specifically dominating the automotive connector market, from which it derives almost half of its revenue. While the firm’s entire business benefits from trends toward efficiency and connectivity, these are especially notable in cars, where shifts toward electric and autonomous vehicles provide lucrative opportunities for TE to sell into new vehicle sockets, like an onboard charger or advanced driver-assist system.

TE Connectivity's September-quarter earnings beat management guidance. Sales rose 17% year over year to $4.75 billion, and non-GAAP operating margin rose 130 basis points year over year to 19.9%. Guidance implies a seasonal sequential revenue decline but good margin expansion.

TE Connectivity's June quarter results handily beat management guidance on the top and bottom lines. Sales rose 14% year over year and 9% sequentially to $4.5 billion, with 9% organic growth year over year. September quarter guidance implies flat revenue and earnings sequentially.

TE Connectivity designs and manufactures connectors and sensors, supplying custom and semicustom solutions to a bevy of end markets in the transportation, industrial, and communications industries. TE has maintained a leading share of the global connector market for the last decade, specifically dominating the automotive connector market, from which it derives almost half of its revenue. While the firm’s entire business benefits from trends toward efficiency and connectivity, these are especially notable in cars, where shifts toward electric and autonomous vehicles provide lucrative opportunities for TE to sell into new vehicle sockets, like an onboard charger or advanced driver-assist system.

TE Connectivity's March-quarter results came in well above guidance. Revenue rose 4% year over year to $4.14 billion, and non-GAAP operating margin rose 90 basis points year over year to 19.4%. June-quarter guidance implies 4% sequential revenue growth to $4.3 billion.

TE Connectivity designs and manufactures connectors and sensors, supplying custom and semicustom solutions to a bevy of end markets in the transportation, industrial, and communications industries. TE has maintained a leading share of the global connector market for the last decade, specifically dominating the automotive connector market, from which it derives almost half of its revenue. While the firm’s entire business benefits from trends toward efficiency and connectivity, these are especially notable in cars, where shifts toward electric and autonomous vehicles provide lucrative opportunities for TE to sell into new vehicle sockets, like an onboard charger or advanced driver-assist system.

TE Connectivity designs and manufactures connectors and sensors, supplying custom and semicustom solutions to a bevy of end markets in the transportation, industrial, and communications industries. TE has maintained a leading share of the global connector market for the last decade, specifically dominating the automotive connector market, from which it derives almost half of its revenue. While the firm’s entire business benefits from trends toward efficiency and connectivity, these are especially notable in cars, where shifts toward electric and autonomous vehicles provide lucrative opportunities for TE to sell into new vehicle sockets, like an onboard charger or advanced driver-assist system.

TE Connectivity announced an agreement to acquire privately held Richards Manufacturing for $2.3 billion in cash. Richards is a supplier of connectors and hardware for electric and natural gas utilities, primarily for North America. The firms expect the deal to close in the June quarter of 2025.

TE Connectivity's fiscal 2025 first-quarter sales of $3.84 billion were flat year over year and down 6% sequentially. Non-GAAP operating margin of 19.4% rose 30 basis points year over year and 80 basis points sequentially. Second-quarter sales guidance of $3.95 billion implies 3% sequential growth.

TE Connectivity designs and manufactures connectors and sensors, supplying custom and semicustom solutions to a bevy of end markets in the transportation, industrial, and communications industries. TE has maintained a leading share of the global connector market for the last decade, specifically dominating the automotive connector market, from which it derives almost half of its revenue. While the firm’s entire business benefits from trends toward efficiency and connectivity, these are especially notable in cars, where shifts toward electric and autonomous vehicles provide lucrative opportunities for TE to sell into new vehicle sockets, like an onboard charger or advanced driver-assist system.

We maintain our $145 fair value estimate for shares of narrow-moat TE Connectivity with our long-term thesis unchanged after good fiscal fourth-quarter results. TE is facing a mixed demand environment, with softer demand in automotive and industrial markets and incredible strength for its artificial intelligence portfolio. We like the firm's execution amid this mixed demand, with good outperformance over its end markets and improved profitability. We believe fiscal 2025 will continue to paint a mixed picture, but we like TE's position for the long term. We expect continued outperformance as TE benefits from ongoing growth in electric and hybrid vehicles and AI investment rises. We see shares as fairly valued.

We raise our fair value estimate for narrow-moat TE Connectivity to $145 per share, from $135, after raising our medium-term profitability forecast for the firm. TE’s end markets have remained consistent throughout fiscal 2024, with pockets of weakness in industrial and commercial transportation applications offsetting healthy demand in cars and data centers. Despite fiscal fourth-quarter sales guidance missing our model, profits are outperforming our expectations and we have greater confidence in stronger margin performance to endure over the next five years. We also expect demand to begin recovering in industrial and commercial transportation in fiscal 2025. We see shares as fairly valued.

TE Connectivity designs and manufactures connectors and sensors, supplying custom and semicustom solutions to a bevy of end markets in the transportation, industrial, and communications industries. TE has maintained a leading share of the global connector market for the last decade, specifically dominating the automotive connector market, from which it derives almost half of its revenue. While the firm’s entire business benefits from trends toward efficiency and connectivity, these are especially notable in cars, where shifts toward electric and autonomous vehicles provide lucrative opportunities for TE to sell into new vehicle sockets, like an onboard charger or advanced driver-assist system.