Despite the encouraging quarterly results, TE Connectivity's guidance for the first calendar quarter of 2026 reflects headwinds, primarily stemming from the Chinese electric vehicle (EV) market. The cessation of customer incentives in China led to an acceleration of orders, prompting demand pull-forward and subsequently a temporary shortfall in new bookings for the upcoming period. This dynamic introduces some near-term uncertainty in the automotive segment's contribution to the company's revenue.
On a more positive note, TE Connectivity has experienced increased bookings in its industrial division. This robust demand is driven by sectors such as data center and artificial intelligence infrastructure, energy, defense, and a broad array of industrial applications. These developments partially offset the automotive sector's softness, providing a more balanced outlook for the company's order intake.
Reflecting these operational details, Truist Securities has adjusted its calendar year 2027 earnings per share (EPS) forecast for TE Connectivity to $12.51 from an earlier $12.11. The firm notes that the company is revising its financial reporting approach by excluding amortization expenses, which contributes to the updated EPS projection.
Additional company disclosures revealed that TE Connectivity’s fiscal first-quarter earnings and revenues surpassed analysts' expectations, an achievement attributed to strong performance in the Industrial and Transportation segments. These results were announced on Wednesday and have drawn investor attention due to their indication of underlying operational strength. The company's shares experienced a modest uptick during pre-market trading following the announcement, highlighting market responsiveness to the positive financial metrics.
Overall, TE Connectivity's results emphasize its capability to deliver solid financial outcomes across key end markets despite current challenges within the automotive domain, particularly in the Chinese EV sector.