TE Connectivity TEL is scheduled to report its first-quarter fiscal 2025 earnings results on Jan. 22.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

TEL expects fiscal first-quarter adjusted earnings to be around $1.88 per share, including headwinds of 4 cents related to the tax rate, suggesting 2% year-over-year growth.

The Zacks Consensus Estimate for earnings is pegged at $1.89 per share, unchanged over the past 30 days, and indicates 2.72% growth from the figure reported in the year-ago quarter.

TE Connectivity beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and was in line in the remaining one, with the average surprise being 2.83%.

TEL’s Q1 Sales Suffer From Seasonality

TE Connectivity expects fiscal first-quarter sales to be $3.9 billion, which suggests 2% year-over-year growth. The consensus mark for fiscal first-quarter sales is pegged at $3.91 billion, implying year-over-year growth of 2.09%.

Increasing demand for TEL’s solutions in Artificial Intelligence (AI) applications is expected to have driven top-line growth in the to-be-reported quarter. This is expected to have driven strong Communications Solutions sales in fiscal first quarter.

Improving Commercial Aerospace and Defense end markets and strength in renewable applications are expected to have benefited Industrial Solutions segment sales in the to-be-reported quarter.

TE Connectivity’s strong position in hybrid and electric vehicles, along with strong demand for its solutions supporting data connectivity and further electronification benefits across all powertrains, are key catalysts that are expected to have driven Transportation segment sales in the to-be-reported quarter.

However, continued weakness in Commercial Transportation and Sensors due to sluggish industrial application market are expected to have negatively impacted segment sales.

TEL’s Segment Revenue Estimates Show Mixed Trend

The Zacks Consensus Estimate for first-quarter fiscal 2025 Transportation segment sales is pegged at $2.337 billion, suggesting a 1.5% year-over-year decline.

The consensus mark for Industrial Solutions sales is pegged at $1.045 billion, indicating roughly 2% year-over-year growth. 

The Zacks Consensus Estimate for the Communications Solutions segment sales is expected to jump 25% to $541 million.

What Our Model Says

According to the Zacks model, 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. That is the exact case here.

TE Connectivity currently has an Earnings ESP of +1.06% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

What to do With TEL Stock Ahead of Q1 Earnings?

Since Oct. 30, 2024, when TEL reported its fourth-quarter fiscal 2024 result, shares have declined 4%, outperforming the Zacks Electronics Miscellaneous Components industry but lagging the broader Zacks Computer & Technology sector.

Over the same time frame, the industry has dropped 4.7%, while the sector has appreciated 3.6%.

We expect TEL’s share price movement to remain muted in the near term given macroeconomic challenges it is facing in the Transportation Solutions, its largest segment in terms of sales. 

However, prospects are bright, given the growing demand for its AI solutions. Hence, investors who already own the stock may expect the company’s growth prospects to be rewarding over a longer term.

Other Stocks to Consider

Here are some other companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings in their upcoming releases:

ServiceNow NOW has an Earnings ESP of +1.04% and a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ServiceNow shares have gained 42.4% in the trailing 12-month period. GRMN is set to report its fourth-quarter 2024 results on Jan. 29.

Amphenol APH presently has an Earnings ESP of +1.71% and a Zacks Rank #2. 

Amphenol shares have returned 41.7% in the trailing 12-month period. APH is set to report its fourth-quarter 2024 results on Jan. 22.

DoorDash DASH currently has an Earnings ESP of +39.05% and a Zacks Rank #2.

DASH shares have surged 66.7% in the trailing 12-month period. DASH is set to report its fourth-quarter 2024 results on Feb.11.

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