Is TE Connectivity’s Buyback Still Lifting Earnings Per Share? Trefis Team Wed, November 11, 2026 at 1:51 PM EST 3 min read ^GSPC +1.46% TEL +1.52% CSCO +3.73% TXN +3.36% MSI +0.90% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
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TE Connectivity (TEL) stock has lost 8.9% over the past year, trailing the S&P 500's 13.1% return. The company, however, has kept shrinking its share count, reducing it by 7.3% over three fiscal years so each share you hold owns a larger slice of earnings. That pays off only if TE continues to retire shares using its own cash. Is the buyback still lifting what each share earns?
TE Has Grown Earnings Per Share Faster Than Profit
So far, yes. Over the three fiscal years to September 2026, TE's diluted earnings per share grew 22.5% a year, compared with a 19.4% annual increase in net income. A smaller share count accounts for that difference of about three points a year. The share count fell in each of those years, dropping to 291 million in fiscal 2026.
In fiscal 2026, TE's buybacks, after taking out the stock it pays employees, came to 2.7% of its market value at the latest close. Your number of shares stays the same; each one's claim on earnings grows, and its value still depends on the price. The count did shrink more slowly in fiscal 2026, by 1.7% against 3.3% the year before. The two figures need not match: the 2.7% sets a year of buyback spending against today's lower market value, while the 1.7% is the drop in the average share count.
Where TE's Buyback Money Comes From
The money comes from cash generated by the business, and so far there has been enough. In fiscal 2026, TE's free cash flow was 1.2 times what it spent on buybacks and dividends.
The business behind that cash is growing. Revenue rose 15.2% over the latest twelve months. Its operating margin over the same twelve months, at 20.8%, was the highest at any fiscal quarter end since the start of fiscal 2017. TE's fastest growth came in Industrial Solutions, where sales rose 20% in fiscal Q4 2026. Orders in its Digital Data Networks business, which sells to hyperscale customers, grew roughly 70% over the full year. That business is part of Industrial Solutions. Management expects net sales to grow 10% in fiscal 2027.
Is TE Also Spending Its Cash On Acquisitions?
It is. Management said TE's strong cash generation and healthy balance sheet give it flexibility in how it deploys capital. In fiscal 2026, management committed a sum equal to almost half of the year's free cash flow to bolt-on acquisitions in Industrial Solutions. It expects the pending Astrodyne TDI acquisition to close by the end of fiscal Q1 2027.
TE has room for both on its balance sheet. Net debt stands at 0.8 times EBITDA, and operating profit is 33 times interest expense.
On the October 28, 2026 call, management also named two pressures: heightened inflation in resins, metals and freight, with little relief in sight, and global vehicle production that it expects to be down slightly in fiscal 2027. If weaker cash flow or more deals leave less cash for buybacks, the share count would shrink more slowly, and earnings per share would grow closer to the pace of net income.
It would slow, or stop, if less cash were left over for buybacks. TE's share count is still falling, and its free cash flow is still larger than what it pays out in buybacks and dividends. The cash is the less certain part, now that TE is also paying for the Astrodyne TDI deal and other bolt-ons. TE's buyback spending in fiscal Q1 2027, the quarter that deal is due to close, is the number to watch when it reports in January 2027.
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