TE Connectivity plc

What they do

TE Connectivity designs and manufactures connectors, sensors, relays, heat shrink tubing, and application tooling. Its products enable power, signal, and data distribution for automotive, commercial transportation, industrial equipment, energy, and data center applications. The company operates through two segments: Transportation Solutions and Industrial Solutions.

Revenue drivers

• Transportation Solutions — Generated 54% of net sales in fiscal 2025. Sells terminals, connector systems, sensors, and other components for automotive, commercial transportation, and sensor applications. Automotive end market accounts for 75% of segment sales.
• Industrial Solutions — Generated 46% of net sales in fiscal 2025. Provides connectivity and sensor solutions for energy, automated factories, data centers, and other industrial end markets. Includes solutions supporting AI infrastructure and energy networks.

Recent performance

In the fiscal third quarter ended June 26, 2026, net sales were a record $5.16 billion, up 14% year over year, with organic growth of 12%. GAAP diluted EPS was $2.55, up 19%, and adjusted EPS was a record $2.94, up 22%. Operating cash flow was $1.2 billion for the quarter. Year-to-date free cash flow was $2.2 billion, and $2.0 billion was returned to shareholders.

Strategy

Management is focused on growing content with customers and outperforming end markets, particularly in AI-driven data centers and broader energy infrastructure. The company has reorganized into two segments and is investing for growth while maintaining strong margins. It continues to pursue strategic acquisitions, as evidenced by the announced agreement to acquire Astrodyne TDI for approximately $1.4 billion.

Risks

• Automotive cyclicality — Transportation Solutions derives a large portion of sales from automotive, which is subject to cyclical demand and could be affected by recession or shifts in vehicle production.
• Global economic and geopolitical conditions — Risks include recession, inflation, tariffs, supply chain disruptions, and political instability that could impact demand and operations.
• Competition and technological change — Pricing pressure, competition, and rapid technological changes could affect market acceptance and margins for existing and new products.
• Foreign exchange fluctuations — Changes in currency exchange rates can impact reported sales and earnings, despite hedging activities.

Outlook

For the fourth quarter of fiscal 2026, the company expects sales of approximately $5.25 billion, up 11% year over year, and adjusted EPS of approximately $3.05, up 18%. Management expects continued double-digit sales and EPS growth for fiscal 2026, with strong momentum into 2027. The Astrodyne TDI acquisition is expected to close by the end of calendar year 2026 and is anticipated to contribute annual sales of more than $250 million.