TE Connectivity Reports Strong Quarterly Earnings

TE Connectivity, a leading supplier in the automotive and communications technology industry, has announced its fiscal fourth-quarter earnings, surpassing market expectations. Alongside this positive news, TE Connectivity also provided guidance that indicates a favorable outlook for the company.

Impressive Fourth-quarter Performance

In the fiscal fourth quarter of 2023, TE Connectivity reported earnings per share (EPS) of $1.78 from sales amounting to $4 billion. These figures exceeded Wall Street's estimates of $1.76 EPS and $4 billion in sales. It is worth noting that in the same period the previous year, TE Connectivity earned an EPS of $1.88 from sales totaling $4.4 billion.

Positive Guidance for the Future

Terrence Curtin, CEO of TE Connectivity, expressed his satisfaction with the company's strong finish to fiscal 2023. Curtin highlighted their ability to surpass earnings guidance for the quarter, coupled with record-breaking cash flow. Looking ahead to the year 2024, TE Connectivity remains confident in their ability to achieve profitable growth by leveraging key trends such as e-mobility, renewable energy, and artificial intelligence.

For the fiscal first quarter of 2024, TE Connectivity projects an adjusted EPS of approximately $1.70, with sales amounting to $3.9 billion. While Wall Street estimates align closely with these projections, forecasting an EPS of $1.7 billion and $3.9 billion in sales respectively, this guidance still serves as a positive indicator for the company's performance.

Stronger Performance Compared to Competitors

TE Connectivity's consistent guidance in line with Wall Street estimates sets it apart from other technology-driven automotive suppliers who have recently provided weaker updates. For instance, ON Semiconductor (ON), an auto chip supplier, recently announced that fourth-quarter sales are expected to reach approximately $2 billion, falling short of market expectations of $2.2 billion. Consequently, ON Semiconductor shares have experienced a 25% decline this week.

Future Insights and Expectations

As investors eagerly anticipate more insights about the company's performance in 2024, TE Connectivity's management will be hosting a conference call at 8:30 a.m. Eastern time. This call will provide valuable information and analysis on how TE Connectivity plans to navigate the challenges posed by rising interest rates and a potentially slowing economy.

Market Performance

Before the announcement, TE stock had experienced a 5% decline over the past 12 months. In contrast, the S&P 500 and Dow Jones Industrial Average have seen respective increases of 9% and 1% during the same period.