Internal Control and Compliance - The company has identified material weaknesses in its internal control over financial reporting, impacting the accuracy and timeliness of financial results as of December 31, 2024 or 2023[178] - Remediation efforts are underway, including the engagement of third-party consultants and a risk assessment to strengthen internal controls[178] - The company faces risks related to compliance with environmental laws, which could adversely affect demand for its products and overall revenue[165] - Legal and regulatory risks, including potential violations of anti-bribery laws, could disrupt business operations and negatively impact financial condition[164] - The company is exposed to litigation risks that may result in significant expenses and could adversely affect financial results[176] - The company has discovered deficiencies in its trade compliance program, which could lead to governmental enforcement actions and negatively affect business operations[173] Taxation and Financial Impact - The company is subject to various tax regulations across multiple jurisdictions, which could lead to volatility in its global effective tax rate[157] - The implementation of the OECD's Pillar Two framework will establish a global minimum effective tax rate of 15% starting January 1, 2024, potentially increasing the company's tax liabilities[160] - The effective tax rate is expected to fluctuate due to various factors, including foreign tax rate differentials and changes in tax laws[261] - Future audits by tax authorities could impact the company's tax rate and financial condition[161] - The company’s deferred tax assets are recognized based on the likelihood of realization, with significant judgment required in assessing future taxable income and the need for a valuation allowance[372] Financial Performance - Net revenue for the year ended December 31, 2024, decreased by 3.0% compared to the prior year, with an organic decrease of 1.5% after excluding foreign currency exchange rate impacts and divestiture effects[270] - Operating income for the year was $149.3 million, representing 3.8% of total net revenue, a decrease from 4.5% in the previous year[268] - The company reported a net income of $128.5 million, or 3.3% of total net revenue, compared to a net loss of $3.9 million in the prior year[268] - Adjusted operating income for the same period was $748.5 million, resulting in an adjusted operating margin of 19.0%[312] - The adjusted net income for the year ended December 31, 2024, was $519.1 million, leading to an adjusted EPS of $3.44[312] Revenue Segmentation - Performance Sensing generated net revenue of $2,743.6 million, accounting for 69.8% of total net revenue, while Sensing Solutions contributed $1,061.3 million, or 27.0%[268] - Automotive end market net revenue increased by 0.6%, with an organic growth of 1.5% after adjusting for foreign currency changes, driven by content growth[272] - HVOR end market net revenue decreased by 2.7%, with an organic decline of 2.1% after excluding foreign currency effects, primarily due to market decline[273] - Sensing Solutions net revenue decreased by 8.2%, with a 7.9% organic decline after excluding foreign currency impacts, reflecting weakness in industrial content[274] Costs and Expenses - Total operating costs and expenses for the year ended December 31, 2024 were $3,783.5 million, representing 96.2% of net revenue, an increase from 95.5% in the prior year[276] - Operating income decreased by $32.4 million, or 17.8%, to $149.3 million, primarily due to a $150.1 million goodwill impairment charge and a $98.8 million loss on the sale of the Insights Business[286] - Interest expense amounted to $155.8 million, which is 4.0% of total net revenue, down from 4.5% the previous year[268] Goodwill and Impairment - The company recorded a $150.1 million non-cash goodwill impairment charge in Q3 2024, primarily due to a lower long-range financial forecast[283] - The company recorded a non-cash goodwill impairment charge of $321.7 million in Q4 2023 for the Insights reporting unit, representing the entire goodwill balance allocated to that unit[365] - The company evaluates goodwill for impairment annually, with the most recent assessment indicating that no reporting units, except Dynapower, are at risk of failing the goodwill impairment test[368] Cash Flow and Capital Management - Net cash provided by operating activities for fiscal year 2024 was $551.5 million, an increase from $456.7 million in 2023[329] - Free cash flow for fiscal year 2024 was $393.0 million, compared to $272.1 million in 2023[319] - The company anticipates capital expenditures of approximately $150.0 million in fiscal year 2025, funded by cash flows from operations[333] - The company repurchased approximately 1.9 million ordinary shares at a weighted average price of $36.19 during the year ended December 31, 2024, with $403.0 million remaining under the September 2023 share repurchase program[348] Accounting Standards and Disclosures - The company adopted ASU No. 2023-07 on January 1, 2024, which requires annual and interim disclosures of significant segment expenses and other segment items[374] - ASU No. 2023-09, effective after December 31, 2024, will enhance transparency in income tax disclosures, with key changes being assessed for implementation by the year ending December 31, 2025[375] - ASU No. 2024-03, issued in November 2024, mandates detailed disclosures of income taxes paid, including federal, state/local, and foreign taxes, effective for annual periods beginning after December 15, 2026[376] - The company is currently evaluating the impact of ASU No. 2024-03 on its consolidated financial statements and disclosures[377] - The new guidance under ASU No. 2023-07 will be applied retrospectively to all prior periods presented in the Annual Report on Form 10-K for the year ended December 31, 2024[374]

Core Viewpoint - Sensata Technologies Holding plc reported a decline in adjusted earnings per share and revenues for the fourth quarter of 2024, attributed to product lifecycle transitions and divestitures, but exceeded management's expectations due to stronger auto production in key markets [1][2]. Financial Performance - Adjusted EPS for Q4 2024 was 76 cents, down from 81 cents year-over-year, meeting the Zacks Consensus Estimate [1]. - Revenues for the quarter were $907.7 million, an 8.5% decrease from the previous year, but above management's guidance of $870-$900 million and 2.4% higher than consensus estimates [2]. - Adjusted operating income was $175 million, down from $183.7 million in the prior-year quarter, with an adjusted operating margin of 19.3%, an increase of 80 basis points [5]. Segment Performance - Performance Sensing revenues, which account for 71.2% of total revenues, decreased 6.5% year-over-year to $646.7 million, with adjusted operating income dropping to $152 million from $170.6 million [4]. - Sensing Solutions revenues, making up 28.8% of total revenues, were $261 million, down 2.3% year-over-year, with adjusted operating income slightly increasing to $79.4 million [4]. Cash Flow and Shareholder Returns - The company generated $170.7 million in net cash from operating activities, up from $105.1 million a year ago, with free cash flow increasing to $138.9 million from $56.7 million [6]. - Sensata returned $17.9 million to shareholders through dividends and repurchased shares worth $21.6 million [8]. Outlook - Management expects full-year 2025 revenues to stabilize around $3.6 billion, despite a $300 million revenue exit in 2024, with Q1 revenues projected between $870-$890 million, indicating a decline of 4-2% [9][10]. - Adjusted operating margins are anticipated to reach 19% or higher in Q2 2025, with gradual revenue increases expected in the second quarter [9].

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $908 million, exceeding guidance of $870 million to $900 million, but down 8% from $992 million in Q4 2023 [9][12] - Full-year revenue was $3.93 billion, a decrease of approximately 3% from $4.05 billion in 2023, with an adjusted decrease of about 1% after accounting for divestitures [12] - Adjusted operating income for Q4 2024 was $175 million, with a margin of 19.3%, up 80 basis points from 18.5% in Q4 2023 [13] - Full-year adjusted earnings per share was $3.44, down from $3.61 in 2023 [13] - Free cash flow for the year totaled $393 million, with a conversion rate of 76% of adjusted net income, up from 49% in 2023 [10][36] Business Line Data and Key Metrics Changes - Performance Sensing reported revenue of $2.74 billion in 2024, roughly flat year-over-year, with a 24.6% operating margin, down 80 basis points [14] - Sensing Solutions, primarily Industrial and Aerospace, reported revenue of $1.06 billion, an 8% decrease year-over-year, but operating margins increased to 29.5% [15][16] Market Data and Key Metrics Changes - The automotive and heavy vehicle markets contracted, yet Performance Sensing achieved outgrowth of approximately 350 basis points [14] - The industrial end market demand has not yet turned, but there are signs of stabilization in Q4 2024 [15] Company Strategy and Development Direction - The company aims to return to growth, improve operational performance, and optimize capital allocation [23][24] - Focus on innovation and customer relationships to drive growth, particularly in the automotive sector [24][26] - Plans to enhance operational excellence through lean manufacturing and supply chain improvements [30][32] Management's Comments on Operating Environment and Future Outlook - Management expects organic revenue for 2025 to be flat compared to 2024, with a focus on returning to growth in the long term [25][40] - The company is well-positioned with a strong product portfolio to capitalize on opportunities in electrification and HVAC systems [26][27] - Management is optimistic about cash flow generation and plans to prioritize reducing net leverage and share repurchases [33][35] Other Important Information - The company reduced net leverage to under 3x trailing 12-month EBITDA for the first time in three years [10][37] - A quarterly dividend of $0.12 per share was announced for Q1 2025 [39] Q&A Session Summary Question: What drove the outperformance in auto production? - Management noted that the first half of 2024 benefited from stronger internal combustion engine (ICE) performance, particularly in Europe, and expects modest outgrowth in 2025 [49][51] Question: When should the company expect to gain share in the EV business in Europe? - Management indicated that they are well-positioned for upcoming launches, but significant gains may not materialize until 2026 or 2027 [55] Question: How much of the margin expansion is driven by operational improvements versus revenue leverage? - Management stated that while volume is important, operational productivity improvements are expected to drive margin expansion in 2025 [59][61] Question: What enabled the impressive free cash flow conversion in Q4? - The operational team improved inventory management significantly, contributing to the strong free cash flow conversion [63][64] Question: Will growth be more organic or through M&A? - Management emphasized that growth will focus on organic opportunities at this time, particularly in Asia Pacific and China [68][70] Question: What is the company's exposure to tariffs? - Management noted that while there is some exposure, they have a redundant manufacturing structure that allows for flexibility in response to potential tariffs [73][75] Question: What are the opportunities in the Industrial and Aerospace businesses? - Management highlighted potential in thermal management and electrical protection, particularly in heat pumps and leak detection [102][104]

Sensata Fourth Quarter and Full Year 2024 Earnings Presentation "I believe that there is a significant opportunity to create shareholder value by returning Sensata, over time, to growth, driving operational excellence, and efficiently deploying capital. Our high value and differentiated margin businesses, strong global engineering footprint, and deep, long- lasting customer relationships provide us an excellent foundation on which to build for future success." February 11, 2025 Forward-Looking Statements an ...

Core Insights - Sensata reported revenue of $907.69 million for Q4 2024, marking an 8.5% decline year-over-year, with EPS at $0.76 compared to $0.81 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $886.79 million by 2.36%, while the EPS met the consensus estimate [1] Financial Performance - Sensing Solutions segment generated net revenue of $260.99 million, surpassing the average estimate of $252.84 million, reflecting a 9% increase year-over-year [4] - Performance Sensing segment reported net revenue of $646.70 million, slightly above the average estimate of $633.88 million, but down 14.1% year-over-year [4] - Segment profit for Sensing Solutions was $79.35 million, exceeding the average estimate of $72.72 million [4] - Segment profit for Performance Sensing was $152 million, below the average estimate of $163.32 million [4] Stock Performance - Sensata's shares have declined by 6% over the past month, contrasting with a 4.2% increase in the Zacks S&P 500 composite [3] - The company currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

分组1 - Sensata reported quarterly earnings of $0.76 per share, matching the Zacks Consensus Estimate, but down from $0.81 per share a year ago [1] - The company posted revenues of $907.69 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 2.36%, but down from $992.49 million year-over-year [2] - Sensata has surpassed consensus revenue estimates two times over the last four quarters [2] 分组2 - The stock has underperformed the market, losing about 5.8% since the beginning of the year compared to the S&P 500's gain of 3.1% [3] - The current consensus EPS estimate for the coming quarter is $0.77 on revenues of $900.28 million, and for the current fiscal year, it is $3.30 on $3.7 billion in revenues [7] - The Instruments - Control industry, to which Sensata belongs, is currently in the bottom 19% of over 250 Zacks industries, indicating potential challenges ahead [8]

Revenue Performance - Fourth quarter revenue was $907.7 million, a decrease of $84.8 million, or 8.5%, compared to $992.5 million in Q4 2023[5] - Full year revenue was $3,932.8 million, a decrease of $121.3 million, or 3.0%, compared to $4,054.1 million in 2023[9] - Net revenue for Q4 2024 was $907.69 million, a decrease of 8.5% from $992.49 million in Q4 2023[34] - Sensing Solutions revenue for the full year 2024 was $1.06 billion, a decrease of 8.2% from $1.16 billion in 2023[41] - Performance Sensing revenue for Q4 2024 was $646.70 million, down 6.5% from $691.76 million in Q4 2023[41] - The Americas accounted for 39.1% of total revenue in Q4 2024, down from 43.3% in Q4 2023[42] Operating Income and Profitability - Operating income was $73.8 million, or 8.1% of revenue, an increase of $275.2 million compared to an operating loss of $201.4 million in Q4 2023[6] - Full year adjusted operating income was $748.5 million, or 19.0% of revenue, a decrease of $25.5 million, or 3.3%, compared to $774.0 million in 2023[10] - Operating income for the full year 2024 was $149.28 million, down 17.8% from $181.68 million in 2023[34] - Non-GAAP adjusted operating income for the same period was $174,886 thousand, reflecting an operating margin of 19.3%[46] - The company reported a restructuring-related charge of $321,415 thousand for the year ended December 31, 2024, contributing to a significant increase in operating income[48] Cash Flow and Financial Position - Free cash flow for Q4 2024 was $138.9 million, with total cash on hand at $593.7 million[6] - Cash and cash equivalents increased to $593.67 million in 2024 from $508.10 million in 2023, an increase of 16.8%[39] - Free cash flow for the three months ended December 31, 2024, increased by 144.9% to $138.9 million compared to $56.7 million in the same period of 2023[55] - Total gross indebtedness decreased to $3.2 billion as of December 31, 2024, from $3.4 billion in 2023[58] - Net debt as of December 31, 2024, was $2.6 billion, down from $2.9 billion in 2023[58] Earnings and Shareholder Returns - Adjusted earnings per share for Q4 2024 was $0.76, a decrease of $0.05, or 6.2%, compared to $0.81 in Q4 2023[6] - The company repurchased shares valued at approximately $21.6 million in Q4 2024 and $68.9 million for the full year[7][11] - For the year ended December 31, 2024, the adjusted non-GAAP operating income was $748,482 thousand, with a net income of $519,061 thousand and an EPS of $3.44[47] Guidance and Future Expectations - For 2025, the company expects full year revenue to be approximately $3.6 billion, reflecting organic flat growth compared to 2024[12] - Guidance for Q1 2025 includes expected revenue of $870 million to $890 million, with adjusted operating margin anticipated to be around 18.4%[13] - The company expects GAAP net income for the three months ending March 31, 2025, to be between $50.1 million and $53.1 million, with EPS projected between $0.32 and $0.34[59] Asset and Expense Management - Total assets decreased to $7.14 billion in 2024 from $7.68 billion in 2023, a decline of 7.1%[37] - Research and development expenses decreased to $35.95 million in Q4 2024 from $42.62 million in Q4 2023, a reduction of 15.7%[34] - Adjusted corporate and other expenses for the full year ended December 31, 2024, were $263.9 million, consistent with $263.1 million in 2023[56] - The company incurred $22.7 million in costs related to the 2H 2024 Plan for the year ended December 31, 2024[54] Impairments and Charges - The company reported a goodwill impairment charge of $150.10 million in 2024, down from $321.70 million in 2023[40] - The company incurred a goodwill impairment charge of $321.7 million in the fourth quarter of 2023[50] - The company recorded a deferred tax benefit of $257.7 million related to the transfer of certain intellectual property for the year ended December 31, 2024[54] - The financing and other transaction costs for the year ended December 31, 2024, were reported at $133,066 thousand, impacting overall profitability[47] - For the year ended December 31, 2024, the company reported a loss of $98.8 million on the sale of its Insights business in Q3 2024[54]

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings and revenues for Sensata in the upcoming earnings report, with a focus on how actual results compare to estimates [1][3]. Earnings Expectations - Sensata is expected to report earnings of $0.76 per share, reflecting a -6.2% change year-over-year, and revenues of $886.79 million, down 10.7% from the previous year [3]. - The consensus EPS estimate has been revised 0.92% higher in the last 30 days, indicating a slight bullish sentiment among analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model shows a positive Earnings ESP of +3.08% for Sensata, suggesting analysts have become more optimistic about the company's earnings prospects [10][11]. - However, Sensata currently holds a Zacks Rank of 4, which complicates the prediction of an earnings beat [11]. Historical Performance - In the last reported quarter, Sensata met the expected earnings of $0.86 per share, resulting in no surprise [12]. - Over the past four quarters, Sensata has only beaten consensus EPS estimates once [13]. Market Reaction Factors - An earnings beat or miss may not solely dictate stock movement, as other factors can influence investor sentiment [14]. - Despite a positive earnings outlook, Sensata may not be a compelling candidate for an earnings beat, and investors should consider additional factors before making decisions [16].

Company Transition - Sensata Technologies announced the appointment of Stephan von Schuckmann as the new Chief Executive Officer starting from January 1, 2025, indicating a leadership transition amidst significant industrial challenges [3] Industry Challenges - The company is facing substantial industrial challenges, which may impact its operational strategies and market positioning moving forward [3]

Core Viewpoint - Sensata's recent earnings report shows a mixed performance with adjusted EPS meeting estimates but revenues declining, leading to a downward revision in future guidance and estimates [2][10][11]. Financial Performance - For Q3 2024, Sensata reported adjusted EPS of 86 cents, down from 91 cents a year ago, matching the Zacks Consensus Estimate [2]. - Revenues for the quarter were $982.8 million, a decrease of 1.8% year-over-year, missing the consensus estimate by 0.2% [2]. - Total operating loss was $199.2 million, primarily due to a $150 million goodwill impairment charge and restructuring expenses [6]. Segmental Results - Performance Sensing revenues, accounting for 67.1% of total revenues, fell 5.3% year-over-year to $659.7 million, impacted by local OEMs gaining market share in China [3]. - Sensing Solutions revenues, making up 27.9% of total revenues, decreased by 0.3% to $274.4 million, affected by destocking and a sluggish housing market [4]. - Other revenues increased by 66.4% year-over-year to $48.8 million [5]. Cash Flow & Liquidity - Sensata generated $130.9 million in net cash from operating activities, down from $138.9 million a year ago, while free cash flow increased to $91.3 million from $87.2 million [8]. - As of September 30, 2024, the company had $506.2 million in cash and cash equivalents and $3,174.4 million in net long-term debt [8]. Guidance - For Q4 2024, Sensata projects revenues between $870 million and $900 million, indicating a decline of 11-8% year-over-year [11]. - Adjusted operating income is expected to be between $167.2 million and $175.2 million, reflecting a decrease of 11% to 7% [11]. Market Position - Sensata's estimates have trended downward, with a consensus estimate shift of -13.96% [12][13]. - The company currently holds a Zacks Rank 4 (Sell), indicating expectations of below-average returns in the coming months [15].