TE Connectivity (NYSE: PHONE) Shares were hit by a substantial pullback in valuation this week following the company’s latest quarterly report. Amid a 0.5% gain for the S&P 500 and a jump of 1.5% for the Nasdaq CompositeThe company’s share price fell 12.8% during the stretch.
On April 22, TE released results for the second quarter of its current fiscal year, a period that ended March 27. Despite this week’s sell-off, the stock is still up about 50% over the past year.
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TE Connectivity posted non-GAAP (adjusted) earnings of $2.73 per share on sales of $4.74 billion in the fiscal second quarter. While earnings per share were $0.03 above average analyst estimates, the company’s sales in the period were $20 million below consensus estimates. Contributions from acquisitions helped lift overall revenue about 14.5% year over year, and organic revenue increased 7% compared to the prior-year period, but investors had a negative reaction to the sales shortfall relative to Wall Street’s forecast.
Like the company’s fiscal second quarter report, the company’s guidance for the current quarter was somewhat mixed. Guidance for adjusted earnings of about $2.83 beat the average analyst estimate target for adjusted earnings of $2.79, but the company’s guidance for year-over-year sales growth of about 10% in the quarter suggests a significant sequential slowdown.
On the other hand, guidance for 9% year-over-year organic revenue growth in the quarter actually represents a significant step up from the fiscal second quarter figure. TE’s second-quarter report and guidance actually looked pretty strong, but expectations have risen in the wake of the stock’s rise over the past year.
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