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TE Connectivity Forecasts Strong Q4, Announces $1.4B Astrodyne Deal
TE Connectivity (NYSE: TEL) on Wednesday announced a $1.4 billion acquisition of Astrodyne TDI and issued a fourth-quarter forecast that surpassed Wall Street estimates, driven by strong demand for its artificial intelligence-related products. Despite the positive results and strategic move, the company's shares declined in premarket trading.
Guidance Exceeds Expectations
The electronic components manufacturer projected fourth-quarter adjusted profit of $3.05 per share on revenue of approximately $5.25 billion. According to LSEG data cited by Reuters, analysts had anticipated an adjusted profit of $2.96 per share and revenue of $5.16 billion.
The company attributed the optimistic outlook to a boom in demand for AI-related tools, which has spurred global investment in data centers and network infrastructure. "Our orders are up 70% this year, building strong backlog into next year," CEO Terrence Curtin told Reuters in an interview.
The forecast follows a strong third-quarter performance for the period ended June 26. TE reported revenue of $5.16 billion, a 14% increase driven by its industrial and transportation segments, and an adjusted profit of $2.94 per share. Both figures beat consensus estimates.
AdStrategic Acquisition and Market Response
Alongside its earnings report, TE announced a definitive agreement to acquire Astrodyne TDI, a maker of power management and filtering solutions, for $1.4 billion. The transaction is expected to be completed by the end of 2026.
In response to the announcements, shares of TE Connectivity were down more than 5% in premarket trade on Wednesday. The company's CEO also reiterated a strategy of passing on elevated raw material costs to customers through price increases to preserve profit margins, noting that costs for oil-based products like resins remain high.
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