TE Connectivity (TEL +2.71%) stock got hit with a substantial valuation pullback this week following the company's latest quarterly release. Amid the backdrop of a 0.5% gain for the S&P 500 and a 1.5% jump for the Nasdaq Composite, the company's share price fell 12.8% over the stretch.
On April 22, TE published results for the second quarter of its current fiscal year -- a period which ended March 27. Despite the sell-offs this week, the stock is still up roughly 50% over the last year.
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TE stock slumped on mixed Q2 results
TE Connectivity notched non-GAAP (adjusted) earnings of $2.73 per share on sales of $4.74 billion in fiscal Q2. While earnings per share came in $0.03 ahead of the average analyst forecast, the company's sales in the period were $20 million lower than the consensus forecast. Contributions from acquisitions helped push overall revenue up roughly 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.
NYSE: TEL
Key Data Points
What's next for TE Connectivity?
Like the company's fiscal Q2 report, the company's guidance for the current quarter was somewhat of a mixed bag. Guidance for adjusted earnings of roughly $2.83 topped the average analyst estimate's target for adjusted earnings of $2.79, but the company's guidance for year-over-year sales growth of roughly 10% in the quarter suggests a meaningful sequential deceleration.
On the other hand, guidance for organic revenue growth of 9% year over year in the quarter actually represents a meaningful step up over fiscal Q2's figure. TE's Q2 report and guidance actually looked pretty solid, but have expectations have been raised on the heels of the stock's run-up over the last year.
