TE Connectivity Plc (NYSE:TEL) announced its fiscal 2026 first-quarter results, showcasing significant financial growth fueled by heightened demand in AI, electric vehicles, and related sectors. The company reported adjusted earnings of $2.72 per share, representing a 33% increase compared to the previous year and exceeding analyst expectations of $2.55.
Revenue for the quarter rose to $4.67 billion, an increase of 22% year-over-year, surpassing the consensus estimate of $4.53 billion. Organic growth contributed 15% of this increase, reflecting robust performance across the Industrial and Transportation segments. Adjusted operating margins also improved, reaching 22.2%, up from 20.4% in the same period last year, indicating enhanced operational efficiency.
TE Connectivity reported record-breaking quarterly orders totaling $5.1 billion, a 28% rise compared to the same quarter last year and a 9% increase sequentially. This surge in orders underscores strong market demand and effective execution of the company’s strategic initiatives. Operating cash flow generation reached $865 million, with free cash flow amounting to $608 million. The company returned $615 million to shareholders during the quarter, signaling a commitment to shareholder value. Cash and cash equivalents stood at $1.25 billion at quarter-end, providing financial flexibility.
Segment Breakdown
The Transportation Solutions segment achieved sales of $2.47 billion, while Industrial Solutions contributed $2.20 billion. Operating margins were 21.2% for Transportation Solutions and 23.3% for Industrial Solutions. The Industrial segment led growth with a 38.2% increase in sales, eclipsing the Transportation segment’s 10.0% rise.
CEO Terrence Curtin highlighted the company's strong execution in delivering double-digit earnings and sales growth that outperformed guidance and consensus estimates. He emphasized the impact of ongoing investments in data and power connectivity technologies, which are helping to expand TE Connectivity’s presence in critical growth areas such as artificial intelligence, energy grid strengthening, and next-generation vehicles. These advancements have contributed to automotive content growth outpacing broader market trends.
Curtin also pointed out that the company’s record quarterly orders exceeding $5 billion reflect its solid positioning and strategic momentum amid evolving industry demands.
Looking Forward
For the second quarter of fiscal 2026, TE Connectivity anticipates continued strength, projecting adjusted earnings per share of $2.65. This forecast represents a 20% year-over-year increase and slightly exceeds analyst estimates of $2.63. Revenue is expected to reach $4.70 billion, an increase of 13% reported and 6% organically year-over-year, close to the consensus forecast of $4.72 billion.
The company announced a change in accounting methodology starting in fiscal 2026. Amortization expenses related to intangible assets, along with any relevant tax effects, will be excluded from certain adjusted financial measures to provide clearer insights into operational performance.
Stock Performance
Despite robust quarterly results and a positive outlook, TE Connectivity shares experienced a decline in early premarket trading on Wednesday, dropping 5.26% to $221.00. This movement followed the company’s earnings release and reflects market dynamics reacting to the reported figures.
Overall, TE Connectivity demonstrated solid financial health through strong earnings growth, record orders, and effective capital allocation, positioning the company well to benefit from expanding AI and electric vehicle markets.