TEL earnings analysis
What we found in TEL's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
TE delivered a strong Q3, with revenue up 13.8% year over year to $5.160 billion and broad-based growth led by Industrial Solutions' 21.9% increase. Gross and operating margins expanded modestly year over year, while GAAP EPS increased to $2.55 and adjusted EPS of $2.94 beat consensus. Management's Q4 outlook calls for approximately $5.25 billion of sales and $2.84 of GAAP EPS, but investors should monitor sequential margin pressure, elevated commodity prices, weaker medical demand, and execution of the approximately $1.4 billion Astrodyne acquisition.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Double-digit revenue growth
- Q3 revenue rose $626 million, or 13.8% year over year, to $5.160 billion, with 12.2% organic growth. Sequentially, sales increased 8.9% from $4.74 billion in Q2 FY2026.
- Year-over-year margin expansion
- Gross margin improved 30 basis points year over year to 35.6%, driven primarily by higher volume and manufacturing productivity. Operating margin was 19.0%, up 10 basis points from 18.9% a year ago, though down from 20.1% in Q2 FY2026.
- EPS beat with higher GAAP earnings
- GAAP diluted EPS was $2.55, up from $2.14 in Q3 FY2025; adjusted EPS of $2.94 exceeded the $2.84 consensus estimate. GAAP EPS was below Q2 FY2026's $2.90, reflecting differing special-item impacts.
- Industrial demand led by AI and energy
- Industrial Solutions revenue grew $464 million, or 21.9%, to $2.580 billion. Organic growth was led by digital data networks at 34.0% and energy at 32.7%, with AI applications and grid-hardening/data-center demand cited as drivers.
- Transportation remained positive
- Transportation Solutions revenue increased $162 million, or 6.7%, to $2.580 billion. Commercial transportation organic sales rose 17.8%, while automotive grew 2.9% organically despite a 3.8% Americas decline.
- Strong cash generation supports investment
- Nine-month operating cash flow increased $279 million to $2.997 billion. Capex was $832 million, or roughly 5.7% of nine-month sales of $14.573 billion, versus management's expectation for about 6% of FY2026 sales.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Medical and sensors demand remains weak
- Medical organic revenue declined 7.2% in Q3, driven primarily by reduced demand from supply-chain dynamics, while Sensors organic revenue declined 2.8% due to weaker transportation applications.
- Higher commodity costs create margin risk
- Input-cost exposure is elevated: Q3 average copper was $5.00 per pound versus $4.32 a year earlier, gold was $3,682 per ounce versus $2,715, and the company expects to purchase 195 million pounds of copper in FY2026.
- Astrodyne acquisition adds execution and funding risk
- TE agreed to acquire Astrodyne TDI for approximately $1.4 billion in cash, expected to close by the end of calendar 2026. Funding may use cash, commercial paper, credit-facility borrowings and/or new debt financing.
- Restructuring costs precede savings
- Restructuring charges were $96 million in the first nine months, including $86 million for the FY2026 program; total FY2026 cash spend is expected to be about $110 million, with $58 million of annualized savings not fully realized until fiscal 2029.
- No formal risk-factor update; CBP review pending
- No material changes to risk factors were reported versus the FY2025 10-K. Separately, TE paid $14 million to U.S. Customs and Border Protection related to a Section 301 duty disclosure, though CBP has not completed its review.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $2.55
- Gross margin
- 35.6%
- Operating margin
- 19.0%
- Segment
- Transportation Solutions: $2.580 billion revenue, up 6.7% year over year
- Segment
- Industrial Solutions: $2.580 billion revenue, up 21.9% year over year
What they said about what is next.
For Q4 FY2026, management expects approximately $5.25 billion of sales and GAAP diluted EPS from continuing operations of approximately $2.84. Outlook assumes current foreign-exchange rates and commodity prices, includes an approximately $10 million FX sales headwind versus Q4 FY2025, and excludes the anticipated Astrodyne TDI acquisition.
The filing reads better than the one before it.
What came before.
- 10-Q · April 24, 2026
- TE Connectivity reported net sales of $4,744 million in Q2 FY2026, up 14.5% year-over-year (organic +7.2%), driven by Industrial Solutions and Transportation Solutions. Gross margin expanded to 36.8% and operating…
- 10-Q · January 23, 2026
- TE Connectivity reported quarter net sales of $4,669 million and diluted EPS of $2.53, driven by stronger margins and higher operating income. Operating cash flow was $865 million and free cash flow was $607 million…
- 10-Q · July 29, 2024
- TE Connectivity reported quarterly net sales of $3,979 million (vs. $3,998 million in the prior-year quarter) with operating income rising to $755 million (from $630 million) and diluted EPS from continuing operations…
- 10-Q · January 26, 2024
- TE Connectivity reported quarterly net sales of $3,831 million (down $10 million vs $3,841 million a year ago) and GAAP diluted EPS of $5.76 (versus $1.25 a year ago). Operating income improved to $698 million (from…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
Read the next one first.
We read every filing TEL makes the day it lands, and put it next to what the options market did about it. Members get both, and an alert when a filing arrives.
Cancel anytime · Month to month · Switch tiers whenever