TE Connectivity projects upbeat quarterly results, to buy Astrodyne for $1.4 billion
A tool plate for punching tools is milled out at TE Connectivity in Woerth, Germany, February 16, 2022. REUTERS/Lukas Barth
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July 22 : Electronic equipment maker TE Connectivity on Wednesday forecast fourth-quarter profit and revenue above Wall Street expectations, betting on a boom in demand for its AI-related tools and products.
Growing demand for AI-related tools and products has boosted investments in data centers and network equipment globally, benefiting companies like TE, which produces electrical connector systems used in data centers.
CEO Terrence Curtin told Reuters in an interview that the company would stick to its strategy of passing on higher raw material costs through price hikes to protect its margins, as the cost of oil-based products such as resins remains elevated amid renewed fighting between the U.S. and Iran.
When asked about refunds from President Donald Trump’s tariffs, Curtin said the company had applied for them and had not “gotten big money back,” adding that it would return the refunds to customers, rather than offering broad price cuts.
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Here are some more details:
• TE also said it would buy power management and filtering solutions maker Astrodyne TDI for $1.4 billion, and expects the deal to close by the end of 2026.
• Shares of the company were down more than 5 per cent in premarket trade.
• “Our orders are up 70 per cent this year, building strong backlog into next year,” Curtin said.
• The company forecast an adjusted profit of $3.05 per share for the current quarter, compared with analysts’ expectations of $2.96 per share, according to data compiled by LSEG.
• It expects fourth-quarter revenue to be about $5.25 billion, above analysts’ estimate of $5.16 billion.
• Revenue for the third quarter grew 14 per cent to $5.16 billion, driven by growth in its industrial and transportation segments.
• Analysts on average had expected revenue of $5 billion.
• TE reported an adjusted profit of $2.94 per share for the quarter ended June 26, beating estimates of $2.84.
Source: Reuters
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