TE Connectivity Lifts Outlook as AI Demand Drives Record Orders
TE Connectivity raised its full-year guidance and posted record third-quarter orders, proving that industrial component makers are capturing significant value from the artificial intelligence infrastructure buildout.
TE Connectivity raised its full-year guidance after posting record third-quarter orders, driven by surging demand for artificial intelligence infrastructure and power networks. The manufacturer now expects fiscal 2026 sales to grow roughly 15%, adding more than $2.5 billion in incremental revenue, while adjusted earnings per share are forecast to jump 23% year over year.
The quarterly results underscore the strength of that demand pipeline. Sales reached $5.2 billion, up 14% on a reported basis and 12% organically. Orders surged 27% year over year to a record $5.7 billion, pushing the book-to-bill ratio to 1.1 for both the quarter and the year to date. Adjusted earnings per share climbed 22% to a record $2.94, supported by a 90-basis-point expansion in adjusted operating margins to 21.9%.
Chief Executive Officer Terrence Curtin attributed the outperformance to the company's positioning within a historic capital expenditure cycle. "Our strategic positioning around the accelerating data and power trend continues to drive broad-based outperformance," Curtin said, noting the company is participating in "one of the largest global technology and infrastructure investment cycles."
The industrial segment led the gains, specifically within digital data networks and energy operations. Executives highlighted that both copper and optical connectivity are critical to AI systems, while the immense power requirements of data centers are opening new growth avenues for the company's components.
To accelerate this power and data strategy, TE Connectivity announced a $1.4 billion acquisition of Astrodyne TDI. The deal is expected to contribute more than $250 million in annual sales, bolstering the company's ability to supply the power conversion and connectivity needs of modern data centers.
For market participants, the results illustrate how AI-related capital expenditure is cascading beyond semiconductor manufacturers to specialized industrial suppliers. GAAP operating income landed at $981 million, with GAAP EPS at $2.55 after accounting for restructuring and acquisition charges. With a book-to-bill ratio above 1 and expanding margins, TE Connectivity's order book suggests this infrastructure cycle has durable momentum heading into next year.
