What's in the Cards for TE Connectivity's (TEL) Q4 Earnings?

TE Connectivity Ltd. TEL is scheduled to report fourth-quarter fiscal 2020 results on Oct 28.

For the fiscal fourth quarter, the Zacks Consensus Estimate for revenues is pegged at $2.9 billion, indicating a decline of 12.1% from the prior-year quarter’s reported figure.

Further, the consensus mark for earnings stands at 86 cents, suggesting a decrease of 35.3% from the year-ago reported figure.

Notably, the company surpassed the Zacks Consensus Estimate in each of the trailing four-quarter, the average surprise being 19.61%.

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

The solid execution of TE Connectivity’s strategies, especially cost-reduction and footprint-consolidation initiatives, are expected to have remained key catalysts during the fiscal fourth quarter.

Further, the company’s global manufacturing strategy is anticipated to have benefited its performance in the to-be-reported quarter.

Furthermore, the improving Transportation segment is expected to get reflected in the company’s fiscal fourth-quarter results. The growing proliferation of autonomous features is expected to have acted as a tailwind.

Additionally, the increasing production of hybrid and electric vehicles is anticipated to have aided growth in the segment’s sales. Also, solid content growth is expected to have contributed well to the fiscal fourth-quarter performance of the segment.

Coming to the Communication segment, solid demand for data and devices in cloud applications and data centers, courtesy of increasing work-from-home trend due to the ongoing coronavirus pandemic, is likely to have driven the segment’s growth in the quarter under review.

Further, prospects in the medical business, owing to the strong position of the company in interventional procedures and partnerships with leading device makers, are expected to have contributed well to the Industrial segment’s performance in the to-be-reported quarter.

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

However, uncertainties related to the coronavirus pandemic are expected to get reflected in the company’s fiscal fourth-quarter results. Further, a slowdown in the global auto production is likely to have remained a headwind.

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 +4.46% and a Zacks Rank #2.

Other Stocks to Consider

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

MercadoLibre, Inc. MELI has an Earnings ESP of +258.97% and it currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alphabet Inc. GOOGL has an Earnings ESP of +7.40% and a Zacks Rank of 2 at present.

J2 Global, Inc. JCOM has an Earnings ESP of +2.26% and a Zacks Rank #2.

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