TE Connectivity falls as $1.4B Astrodyne deal overshadows earnings, outlook beat

TE Connectivity (TEL) shares fell about 7% on Wednesday after the electronic components maker announced a $1.4B acquisition alongside quarterly results that topped Wall Street estimates and issued stronger-than-expected guidance.

The company reported adjusted third-quarter earnings of $2.94 per share, topping analysts' estimates by $0.10. Revenue rose 13.9% year over year to $5.16B, exceeding consensus by about $150M.

TE forecast fourth-quarter sales of about $5.25B, above analysts' expectations of $5.15B, and adjusted earnings per share of about $3.05, compared with consensus estimates of $2.98.

The company is acquiring privately held Astrodyne TDI for $1.4B from Tinicum L.P. The power management and filtering solutions maker is expected to contribute more than $250M in annual sales after the deal closes by the end of 2026, TEL said. 

Third-quarter adjusted operating margin expanded 90 basis points to 22%, while total orders reached a record $5.7B, up 27% from a year earlier. Operating cash flow was $1.2B during the quarter, with free cash flow of $883M.

TE Connectivity is a supplier of connectors, sensors, and high-speed connectivity products that is used in the AI infrastructure boom, but its shares have lost 14% so far this year, including Wednesday session losses. The company provides high-speed copper interconnects and connectivity products used by hyperscale cloud providers to link GPUs and servers.