TE Connectivity forecasts Q3 profit above expectations
The company expects a third-quarter profit of $2.83 per share as AI demand boosts industrial sales. However, rising costs may lead to potential price hikes.
The industrial technology firm TZ LTD has issued a financial forecast for the third quarter that exceeds Wall Street expectations. However, the company cautioned that it may be forced to implement price increases for its customers if geopolitical tensions and supply chain disruptions in the Middle East persist. Chief Executive Terrence Curtin highlighted that rising costs for transportation, freight, and oil-derived materials like resins have intensified following the conflict involving Iran. The company is monitoring these variables closely to determine the necessity of pricing adjustments to maintain its profit margins. > "We will have to see how long these impacts last, hopefully not long, and in that regard, (we will) have to pass on pricing to protect our margin," Curtin said. For the current quarter, the company anticipates an adjusted profit of $2.83 per share. This projection sits slightly above the $2.80 per share average estimate compiled by LSEG. The outlook comes despite broader market volatility affecting the petrochemical and oil sectors, which has driven up the cost of plastics and polymers used in manufacturing. The industrial solutions division of the company, which produces electrical connectors for factory automation and data centers, saw a significant 27% year-over-year increase in sales during the second quarter. This growth was largely attributed to the surging demand for artificial intelligence tools and energy infrastructure, particularly power grids designed for high-capacity data centers. The firm, which is headquartered in Ireland, also reported a 4.7% increase in net sales within its transportation solutions segment. This division specializes in sensors and connector systems for the automotive industry. In terms of recent performance, the company reported an adjusted profit of $2.73 per share for the second quarter ended March 27, surpassing analyst estimates of $2.70. Total revenue for the period reached $4.74 billion, falling just short of the anticipated $4.76 billion.
