TE Connectivity weighed on by sales miss and Middle East tensions
TE Connectivity delivered quarterly results slightly below expectations, amid supply chain disruptions linked to tensions in the Middle East. Revenue came in at $4.74bn, compared to the $4.76bn anticipated, triggering a drop of over 10% in the share price during trading. The company cited increased cost pressure, notably due to rising freight rates and petroleum-based materials, such as resins.
Despite the sales decline, adjusted EPS reached $2.73, beating forecasts of $2.70, and the group projects $2.83 for the current quarter, ABOVE the consensus. Faced with uncertainty regarding the duration of the disruptions, management indicated it is considering price hikes to preserve margins. The surge in plastic and polymer costs, linked to volatility in oil flows, is affecting the entire sector.
In the details, the Industrial Solutions division recorded 27% y-o-y growth, driven by demand for artificial intelligence and energy infrastructure, particularly for data centers.
TE Connectivity plc is a global industrial technology company. The Company's range of connectivity and sensor solutions enable the distribution of power, signal, and data to advance next-generation transportation, energy networks, automated factories, data centers enabling artificial intelligence, and more. Its segments include Transportation Solutions and Industrial Solutions. Transportation Solutions segment includes its automotive, commercial transportation, and sensor businesses. The Industrial Solutions segment includes digital data networks; automation and connected living; aerospace, defense, and marine, and energy. Its services and training include 3D Printing for Production (3D4P), Backshells Prototyping - BIT Workx, Electrical Installation Trainings, HarnWare Software, Machine Tooling Service & Repair, Medical Device Design Services, Microfluidic Devices, THE ACADEMY - Automotive Webinars, and Sensor Manufacturing Services.
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