TE Connectivity said it expects adjusted profit for the third quarter to top Wall Street forecasts, but warned that ongoing supply disruptions tied to the Iran war could force the company to increase prices for its customers if elevated input and transport costs persist.
The Galway, Ireland-based manufacturer projected adjusted earnings of $2.83 per share for the current quarter, compared with the $2.80 per-share consensus from analysts compiled by LSEG. The guidance followed second-quarter results that showed an adjusted profit of $2.73 per share, which exceeded the $2.70 consensus.
Revenue for the quarter ended March 27 came in at $4.74 billion, slightly below the $4.76 billion analysts had expected. Management highlighted uneven cost pressure that has emerged since the conflict in the Middle East intensified, noting higher freight rates and rising prices for oil-derived products such as resins.
Chief Executive Terrence Curtin told Reuters that the company is monitoring how long these cost impacts last and indicated TE may need to pass on pricing to customers to preserve 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.
TE reported strong momentum in its industrial solutions segment, where second-quarter sales jumped 27% year-over-year. The company attributed the industrial segment's growth to demand for AI-related tools and energy infrastructure, notably for power-hungry data centers and grid projects.
The transportation solutions segment, which produces terminals, connector systems and sensors used in vehicles, posted a 4.7% year-over-year increase in net sales for the second quarter. Management noted that rising costs for plastics and polymers, driven by disruptions to oil and petrochemical flows linked to the conflict, have prompted some companies to seek mitigation strategies around pricing and other operational levers.
Taken together, the results show TE delivering modest upside on profitability while navigating cost pressures that cut across logistics and raw material inputs. The company flagged the potential need for customer price adjustments as a defensive step to preserve margin if those pressures persist.