TE Connectivity 2025 Q3 Earnings Beats Expectations with Net Income Up 11.3%

TE Connectivity (TEL) reported its fiscal 2025 Q3 earnings on July 22nd, 2025. The company exceeded expectations with a 13.9% increase in revenue to $4.53 billion and a 15.5% rise in EPS to $2.16. TE Connectivity raised its guidance for the fourth quarter, anticipating net sales of approximately $4.55 billion, representing a 12% increase on a reported basis and a 6% organic growth. GAAP EPS from continuing operations is expected to rise by over 140% year-over-year to around $2.18, with adjusted EPS projected at $2.27, marking a 16% increase year-on-year.

Revenue

TE Connectivity experienced robust growth in its revenue for fiscal 2025 Q3, achieving a total of $4.53 billion, a rise of 13.9% from the previous year's Q3. The Transportation Solutions segment contributed $2.42 billion, while the Industrial Solutions segment generated $2.12 billion, showcasing significant contributions from both areas.

Earnings/Net Income

TE Connectivity's earnings per share (EPS) climbed by 15.5% to reach $2.16 in fiscal 2025 Q3, up from $1.87 in 2024 Q3. The company also reported a strengthened profitability with net income increasing by 11.3% to $638 million, indicating a positive EPS performance.

Price Action

The stock price of TE Connectivity has edged up 0.86% during the latest trading day, has edged up 2.87% during the most recent full trading week, and has jumped 10.19% month-to-date.

Post Earnings Price Action Review

Investors employing the strategy of purchasing TE Connectivity (TEL) shares following a quarter-over-quarter revenue drop on the financial report release date and holding for 30 days have seen impressive returns over the past three years. This approach delivered a 96.15% return, outperforming the benchmark return of 88.65% by 7.50%. With a compound annual growth rate (CAGR) of 14.49% and a maximum drawdown of 0.00%, the strategy demonstrated robust performance and effective risk management. A Sharpe ratio of 0.55 and volatility of 26.13% further underscore its stability and success. The strategy highlights the potential for substantial gains even in periods of revenue decline, emphasizing the importance of strategic timing and holding periods in investment decisions.

CEO Commentary

“TE’s strong third quarter results above guidance demonstrate how the diversity of our portfolio and global positioning enable us to achieve record performance in a dynamic environment to deliver value for our owners and customers,” said CEO Terrence Curtin. He highlighted that double-digit sales growth was driven by a 30% increase in the Industrial segment, alongside 20% adjusted operating margins, resulting in records for adjusted EPS and cash generation. The Industrial segment's growth was attributed to high-speed connectivity solutions in AI applications and robust energy business performance, while the Transportation segment showed resilience despite vehicle production declines.

Guidance

For the fourth quarter of fiscal 2025, the company expects net sales of approximately $4.55 billion, reflecting a 12% increase on a reported basis and 6% organically. GAAP EPS from continuing operations is anticipated to be around $2.18, representing over 140% year-over-year growth, with adjusted EPS projected at approximately $2.27, up 16% year over year.

Additional News

TE Connectivity has been actively engaged in strategic moves, including the completion of the Richards Manufacturing acquisition valued at $2.3 billion in the Industrial segment, aiming to capture growth opportunities in the North American utility market. The company also returned $1.5 billion to shareholders, reflecting strong capital deployment and shareholder value creation. Additionally, TE Connectivity has announced a quarterly dividend increase of 9%, underscoring its commitment to providing returns to investors while pursuing growth through acquisitions. These strategic initiatives demonstrate TE Connectivity's focus on expanding its market presence and ensuring robust financial health.