Did TE Connectivity beat its own guidance in fiscal Q2 2026?

Yes. Management said results were above guidance, with sales of $4.74B and adjusted EPS of $2.73, both ahead of the company's expectations for the quarter.

What drove the growth in the quarter?

Industrial Solutions was the main driver, with reported sales up 27%. Digital Data Networks (AI-related demand) rose 48%, and Energy rose 60% reported, aided by acquisitions. Commercial Transportation grew 21%, while Automotive was roughly flat to slightly up and weak in North America and Asia on an organic basis.

Why are GAAP EPS and adjusted EPS different this quarter?

GAAP diluted EPS from continuing operations was $2.90, but it benefited from a net tax item of about $0.39 that was excluded from adjusted EPS. Adjusted EPS of $2.73 is the figure management uses to measure underlying performance, and it also excludes amortization, restructuring, and acquisition charges.

Is the company's balance sheet or cash generation a concern?

Free cash flow is solid at $1.3B for the first half, but total debt increased to about $5.7B and cash declined to $1.11B. Shareholder returns of $1.2B in the first half, plus acquisition spending, were funded partly through higher borrowing, so investors should monitor leverage as capital deployment continues.

TEL 8-K: Earnings & Results & Regulation FD

Q: What is the outlook for the third quarter?

Management expects sales of about $5.0B (up 10% reported, 9% organic), adjusted EPS of about $2.83 (up 17%), and GAAP EPS from continuing operations of about $2.44. Its guidance also points to sequential growth in both segments.

01—Abstract

Summary

Summary of the 8-K filed April 22, 2026. Cited figures are marked; the original filing is the authoritative source.

TE Connectivity (TEL) reported fiscal Q2 2026 results (quarter ended March 27, 2026) that beat its own guidance, with net sales of $4.74 billion^a, up 15% reported and 7% organically year over year.

GAAP diluted EPS from continuing operations was $2.90^b, while adjusted EPS hit a record $2.73, up 24% year over year. GAAP operating margin expanded 200 basis points to 20.1%, and adjusted operating margin rose 130 basis points to 21.7%. Growth was led by Industrial Solutions, where reported sales rose 27% (17% organic), driven by Digital Data Networks (AI-related demand, up 48% reported) and Energy (up 60% reported, including acquisitions).

Transportation Solutions grew 5% reported but declined 1% organically, with Commercial Transportation strong and Automotive weak in North America and Asia. Orders were a standout: record orders of $5.3 billion^c rose 25% year over year and 4% sequentially, with a book-to-bill of 1.12. Free cash flow was $1.3 billion for the first half, up 17% year over year, and the company returned $1.2 billion to shareholders in the period and raised its quarterly dividend by 10%.

Balance sheet items to watch include total debt that rose to about $5.7 billion (long-term debt up to $5.55 billion^d from $4.84 billion), reflecting refinancing and acquisition activity, and cash that fell to $1.11 billion. Management guided fiscal Q3 2026 sales to about $5.0 billion (up 10% reported, 9% organic) with adjusted EPS of about $2.83 (up 17%) and GAAP EPS from continuing operations of about $2.44. The guidance implies continued double-digit growth, though the prior-year quarter's GAAP EPS was distorted by a large tax charge, so GAAP comparisons are not meaningful; adjusted EPS is the cleaner comparison.

02—Key points

Key Highlights

Net sales of $4.74B, up 15% reported and 7% organic; Industrial Solutions up 27% reported and Transportation up 5%.
Record adjusted EPS of $2.73, up 24% year over year; GAAP diluted EPS from continuing operations of $2.90, helped by a $0.39 net tax benefit.
Adjusted operating margin of 21.7%, up 130 bps; GAAP operating margin of 20.1%, up 200 bps.
Record orders of $5.3B, up 25% year over year and 4% sequentially, with book-to-bill of 1.12 and growth in every business.
First-half free cash flow of $1.3B, up 17%; $1.2B returned to shareholders and quarterly dividend raised 10%.
Q3 FY26 guidance of ~$5.0B sales (up 10% reported, 9% organic) and ~$2.83 adjusted EPS (up 17%), reflecting double-digit growth.
Total debt rose to about $5.7B (long-term debt up to $5.55B), and cash fell to $1.11B, which bears watching alongside shareholder returns.

03—Questions

Frequently Asked Questions

Did TE Connectivity beat its own guidance in fiscal Q2 2026?
Yes. Management said results were above guidance, with sales of $4.74B and adjusted EPS of $2.73, both ahead of the company's expectations for the quarter.
What drove the growth in the quarter?
Industrial Solutions was the main driver, with reported sales up 27%. Digital Data Networks (AI-related demand) rose 48%, and Energy rose 60% reported, aided by acquisitions. Commercial Transportation grew 21%, while Automotive was roughly flat to slightly up and weak in North America and Asia on an organic basis.
Why are GAAP EPS and adjusted EPS different this quarter?
GAAP diluted EPS from continuing operations was $2.90, but it benefited from a net tax item of about $0.39 that was excluded from adjusted EPS. Adjusted EPS of $2.73 is the figure management uses to measure underlying performance, and it also excludes amortization, restructuring, and acquisition charges.
What is the outlook for the third quarter?
Management expects sales of about $5.0B (up 10% reported, 9% organic), adjusted EPS of about $2.83 (up 17%), and GAAP EPS from continuing operations of about $2.44. Its guidance also points to sequential growth in both segments.
Is the company's balance sheet or cash generation a concern?
Free cash flow is solid at $1.3B for the first half, but total debt increased to about $5.7B and cash declined to $1.11B. Shareholder returns of $1.2B in the first half, plus acquisition spending, were funded partly through higher borrowing, so investors should monitor leverage as capital deployment continues.

04—Continue

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