TE Connectivity Jumps After Q1 Profit and Sales Beat Forecasts
Shares rise as the industrial technology leader posts record orders and provides a strong outlook, fueled by demand in AI and electric vehicles.
TE Connectivity (NYSE: TEL) saw its shares gain after the company reported first-quarter financial results that significantly surpassed analyst expectations, driven by robust demand in its transportation and industrial segments.
The Switzerland-based manufacturer of connectors and sensors posted adjusted earnings of $2.72 per share on revenue of $4.67 billion for the quarter ending December 26, 2025. These figures comfortably exceeded the consensus forecast, which had anticipated an adjusted EPS of $2.54 on $4.52 billion in revenue, according to MarketWatch.
The strong performance marks a 33% year-over-year increase in adjusted EPS and a 22% rise in revenue, signaling powerful momentum for the nearly $71 billion industrial giant. The company reported a record order book of $5.1 billion, representing a 28% increase from the prior year and resulting in a healthy book-to-bill ratio of 1.1.
Driving the growth was exceptional performance in the company's Industrial segment, which saw sales surge 47% year-over-year to $2.73 billion. TE Connectivity highlighted that the growth was bolstered by high demand for its products used in artificial intelligence applications, particularly within data centers and by hyperscale cloud providers. The Transportation segment also delivered solid results, with sales growing 11% to $2.39 billion, buoyed by the continued electrification of vehicles and increased data connectivity in the automotive sector.
"Our strong first-quarter results, which exceeded our guidance, were driven by our global team's execution and the strength of our portfolio in long-term secular growth trends," said the company in its quarterly earnings presentation. The company's adjusted operating margins expanded by 180 basis points to 22%, reflecting strong operational efficiency.
In response to the strong quarter, TE Connectivity issued an optimistic forecast for its second quarter. The company projects net sales of approximately $4.7 billion, which would represent a 13% year-over-year increase, and an adjusted EPS of about $2.65, up 20% from the same period last year. This guidance suggests management's confidence in sustained demand, with continued sequential growth expected in the Industrial segment offsetting typical seasonality in the automotive-focused Transportation unit, as detailed in company reports.
Despite the strong results and positive outlook, the stock's initial reaction was muted, declining less than 1% in the session following the announcement. However, shares have since trended upward as investors digest the positive long-term implications of the report. The company's stock has a 52-week high of $249.84 and a low of $115.00.
Analysts have a generally positive view of the stock, with a consensus rating of 'Moderate Buy' and an average price target of around $272, according to market data. Following the earnings release, several analysts have reiterated their positions. Baird maintained an "outperform" rating, while Truist Financial held its "Hold" rating while raising its price target.
TE Connectivity also generated significant free cash flow of $608 million during the quarter and announced it returned approximately 100% of this to shareholders through dividends and share buybacks, underscoring its commitment to shareholder value. The company declared a quarterly dividend of $0.71 per share, payable on March 13, 2026.