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TE Connectivity (TEL) to Post Q3 Earnings: What's in Store?

TE Connectivity Ltd. TEL is scheduled to report third-quarter fiscal 2020 results on Jul 29.

For the fiscal third quarter, the Zacks Consensus Estimate for revenues is pegged at $2.4 billion, indicating a decline of 29.6% from the prior-year quarter.

Further, the consensus mark for earnings stands at 42 cents per share, suggesting a decrease of 72% from the year-ago reported figure.

Notably, the company has surpassed the Zacks Consensus Estimate in each of the trailing four-quarter, the average surprise being 10.9%.

TE Connectivity Ltd. Price and EPS Surprise

TE Connectivity Ltd. Price and EPS Surprise

TE Connectivity Ltd. price-eps-surprise | TE Connectivity Ltd. Quote

Factors to Note

TE Connectivity’s footprint consolidation plans and stringent cost cutting strategies are expected to get reflected in the fiscal third-quarter results.

Further, strong momentum across defence, medical and energy businesses may have driven the industrial segment’s performance in the to-be-reported quarter.

Additionally, solid demand for data and devices in cloud applications and data centers courtesy of increasing work-from-home trend amid the ongoing coronavirus pandemic might have benefited the communications segment’s performance in the quarter under review.

Moreover, acquisition of First Sensor is expected to have favored TE Connectivity’s sensors business in the fiscal third quarter.

Growing proliferation of autonomous features is also expected to have acted as a tailwind. Additionally, increasing production of hybrid and electric vehicles is anticipated to have contributed to the fiscal third-quarter performance.

Furthermore, TE Connectivity’s company’s strong focus on content growth across its businesses might have driven the to-be-reported quarter’s performance. Moreover, the company’s expanding content in engineered solutions is likely to get reflected in the fiscal third-quarter results.

However, coronavirus-led disruptions are expected to have weighed on the company’s performance in the commercial transportation and commercial aerospace market in the to-be-reported quarter.

What Our Model Says

Our proven model conclusively predicts an earnings beat for TE Connectivity this time around. 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. 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 +0.3% and a Zacks Rank #3.

Other Stocks to Consider

Here are some other stocks you may consider, as our proven model shows that thesetoo have the right combination of elements to post an earnings beat this quarter.

JD.com, Inc. JD has an Earnings ESP of +13.79% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Wayfair, Inc. W has an Earnings ESP of +43.47% and a Zacks Rank of 2.

Etsy, Inc. ETSY has an Earnings ESP of +1.15% and a Zacks Rank #2.

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