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].

Core Insights - Sensata Technologies Holding plc reported third-quarter 2024 adjusted earnings per share (EPS) of 86 cents, down from 91 cents a year ago, matching the Zacks Consensus Estimate [1] - Revenues for the quarter were $982.8 million, a decrease of 1.8% year over year, slightly missing the consensus estimate by 0.2% [1] Segmental Results - Performance Sensing revenues, accounting for 67.1% of total revenues, fell 5.3% year over year to $659.7 million, primarily due to local OEMs gaining market share in China, partially offset by growth in the Heavy Vehicle & Off Road sector [2] - Sensing Solutions revenues, making up 27.9% of total revenues, were $274.4 million, down 0.3% from the previous year, impacted by destocking and a sluggish housing construction market [3] - Other revenues, which represent 5% of total revenues, increased significantly by 66.4% year over year to $48.8 million [4] Financial Performance - Total operating loss was $199.2 million, compared to operating income of $116.3 million in the prior-year quarter, largely due to a $150 million goodwill impairment charge and restructuring expenses [5] - Total operating expenses rose to $1,182.1 million from $885 million in the prior-year quarter, while adjusted operating income declined by 1.7% year over year to $188.4 million [6] Cash Flow & Liquidity - The company generated $130.9 million of net cash from operating activities, down from $138.9 million in the prior-year quarter, with free cash flow increasing to $91.3 million from $87.2 million [7] - As of September 30, 2024, cash and cash equivalents stood at $506.2 million, while net long-term debt was $3,174.4 million [7] Shareholder Returns - Sensata returned approximately $55.4 million to shareholders, including $37.2 million on share repurchases and $18.1 million in dividends [8] Guidance - For the fourth quarter of 2024, the company projects revenues between $870 million and $900 million, indicating a decline of 11% to 8% year over year [9] - Adjusted EPS is estimated to be between 71 cents and 76 cents, suggesting a decline of 17% to 12% [9]

Financial Data and Key Metrics Changes - Revenue for Q3 2024 was approximately $983 million, a decrease of about 2% compared to $1 billion in Q3 2023. Adjusting for $30 million of revenue exited due to product lifecycle management, revenue would have been up 1% year-over-year [28] - Adjusted operating income was $188 million, representing a margin of 19.2%, which improved by 20 basis points sequentially from Q2 2024 [29] - Adjusted earnings per share were $0.86 in Q3 2024, down from $0.91 in Q3 2023, primarily due to lower revenue and foreign currency fluctuations [30] Business Line Data and Key Metrics Changes - Performance Sensing revenue decreased by approximately 5% year-over-year to about $660 million, with an adjusted operating margin of 24.5%, unchanged sequentially but down a percentage point year-over-year [36] - Sensing Solutions revenue was approximately $274 million, flat compared to the prior year, with the industrial business showing stabilization and approximately 2% sequential growth [37] Market Data and Key Metrics Changes - Automotive and heavy vehicle off-road markets decreased by approximately 5% year-over-year, with further erosion expected in Q4 [14] - In China, local OEMs are expected to hold nearly two-thirds of market share by year-end, up from around 55% last year, impacting content per vehicle negatively [16] Company Strategy and Development Direction - The company is focused on improving operational efficiency, driving execution, and expanding margins, with ongoing initiatives to streamline processes and reduce overhead expenses [12][13] - The company is committed to its Dynapower business and clean energy initiatives, despite a non-cash goodwill impairment charge of $150 million recorded in the quarter [24] Management's Comments on Operating Environment and Future Outlook - Management expressed that challenging market conditions are expected to persist through Q4 and into early 2025, with OEMs adjusting production levels due to inventory issues [46] - The company is building a solid foundation for 2025, emphasizing a long-term strategy focused on high-value sensing and electrical protection solutions [48] Other Important Information - The company completed the sale of its Insights business for $165 million, resulting in a loss on the sale of approximately $110 million [32] - The net leverage ratio dropped to three times trailing 12 months EBITDA as of September 30, 2024, down from 3.2 times [39] Q&A Session Summary Question: Production assumption and guidance for Q1 seasonality - Management indicated that they are 200,000 to 300,000 vehicle units below third-party forecasts for Q4 and do not expect significant help in Q1 [51] Question: Strategy evolution in China amidst market share changes - The company is focusing on local OEMs with aspirations outside of China and believes investments in technology will yield returns despite market challenges [53] Question: EBIT margin improvement from product exits - The exit of $200 million in annualized products could lead to a 30 basis point improvement in margins, with a 20 basis point improvement expected in Q4 [57] Question: Operating efficiencies and internal management - The company is implementing smart automation and lean reimplementation to enhance efficiency and reduce costs [61] Question: Electrification program delays and targets - Delays in electrification programs are primarily seen in North America and Europe, but the company remains optimistic about future growth in this area [67] Question: Market outlook for 2025 - Management does not expect significant market help in the first half of 2025 and is critically evaluating third-party forecasts [68]

Core Insights - Sensata reported revenue of $982.83 million for Q3 2024, a decrease of 1.8% year-over-year, and EPS of $0.86, down from $0.91 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $984.66 million, resulting in a surprise of -0.19%, while the EPS met the consensus estimate [1] Revenue Performance - Net Revenue from Performance Sensing was $659.65 million, which is 12.5% lower than the year-ago figure and below the average estimate of $688.86 million from four analysts [3] - Net Revenue from Sensing Solutions reached $274.39 million, exceeding the estimated $256.27 million and reflecting an 11% increase year-over-year [3] - Other Net Revenue amounted to $48.79 million, surpassing the average estimate of $41.50 million from three analysts [3] Segment Profit Analysis - Segment Profit from Performance Sensing was $161.90 million, below the average estimate of $175.57 million from three analysts [3] - Segment Profit from Corporate and Other was $12.07 million, significantly better than the average estimate of -$70.67 million [3] - Segment Profit from Sensing Solutions was $80.97 million, slightly above the estimated $77.09 million [3] Stock Performance - Over the past month, Sensata's shares have returned -1.2%, while the Zacks S&P 500 composite increased by 0.4% [4] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [4]

Core Insights - Sensata Technologies (ST) reported quarterly earnings of $0.86 per share, matching the Zacks Consensus Estimate, but down from $0.91 per share a year ago [1] - The company posted revenues of $982.83 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 0.19% and down from $1 billion year-over-year [2] - Sensata shares have declined approximately 8.2% year-to-date, contrasting with the S&P 500's gain of 20.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.87 on revenues of $934.82 million, and for the current fiscal year, it is $3.55 on revenues of $3.96 billion [7] - The trend of estimate revisions for Sensata has been unfavorable, leading to a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Instruments - Control industry, to which Sensata belongs, is currently ranked in the bottom 11% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Sensata's stock performance [5]

Financial Performance - Net revenue for Q3 2024 was $982.8 million, a decrease of 1.8% from $1,001.3 million in Q3 2023[109] - Operating loss for Q3 2024 was $199.2 million, representing 20.3% of net revenue, compared to an operating income of $116.3 million (11.6% of net revenue) in Q3 2023[110] - Total operating costs and expenses for Q3 2024 were $1,182.1 million, representing 120.3% of net revenue, compared to $885.0 million (88.4% of net revenue) in Q3 2023[125] - The reported net loss for the same period was $219.6 million, with a diluted EPS of $(0.17)[172] - For the three months ended September 30, 2024, the company reported a net loss of $79.5 million compared to a net loss of $25.0 million for the same period in 2023[183] Revenue and Cost Analysis - Performance Sensing net revenue for Q3 2024 decreased 5.3% compared to the prior period, primarily due to market decline across vehicle end markets[120] - Sensing Solutions net revenue for Q3 2024 decreased 0.3%, attributed to inventory destocking in aerospace and industrial markets[122] - Cost of revenue for Q3 2024 was $701.5 million, accounting for 71.4% of net revenue, influenced by contract termination costs and inventory charges[126] - For the nine months ended September 30, 2024, cost of revenue as a percentage of net revenue increased due to $40.5 million in contract termination costs and inventory charges related to product line lifecycle management[128] Impairment and Losses - A non-cash impairment charge of $150.1 million was recorded for the Dynapower reporting unit in Q3 2024[112] - In the third quarter of 2024, a goodwill impairment charge of $150.1 million was recorded for the Dynapower reporting unit within the Sensing Solutions segment[133] - The company incurred a loss of $110.1 million on the sale of the Insights business during the three months ended September 30, 2024[178] Cash Flow and Liquidity - Operating cash flows generated in the nine months ended September 30, 2024, were $380.8 million, with cash and cash equivalents totaling $506.2 million at the end of the quarter[111] - Free cash flow for the nine months ended September 30, 2024 was $254.1 million, an increase from $215.4 million for the same period in 2023[180] - Net cash provided by operating activities for the nine months ended September 30, 2024 was $380.8 million, up from $351.6 million in the prior year, primarily due to favorable changes in working capital[191] - The company generated $15.2 million from investing activities in the nine months ended September 30, 2024, compared to a cash outflow of $117.6 million in the same period of 2023, largely due to proceeds from the sale of its Insights business amounting to $138.3 million[192] - Net cash used in financing activities decreased to $400.3 million for the nine months ended September 30, 2024, down from $569.8 million in the prior year, primarily due to $500.0 million received from the issuance of Senior Notes[193] Debt and Financing - The company issued 6.625% Senior Notes in June 2024 and redeemed 5.0% Senior Notes to improve liquidity, with a net leverage ratio of 3.0x as of September 30, 2024[115] - Total debt and finance lease obligations as of September 30, 2024 were $3,198.1 million, down from $3,399.2 million as of December 31, 2023[185] - The gross leverage ratio improved to 3.6 as of September 30, 2024, down from 3.8 as of December 31, 2023[185] - The company had $745.8 million available under its Revolving Credit Facility as of September 30, 2024, net of obligations related to outstanding letters of credit[197] Expenses and Adjustments - SG&A expense for the three months ended September 30, 2024, increased primarily due to $5.8 million of accelerated vesting of restricted securities related to the sale of the Insights Business[129] - Amortization of intangible assets for the three months ended September 30, 2024, increased by $9.6 million due to accelerated amortization related to exiting the Spear aerospace and defense business[131] - Restructuring and other charges, net increased for the nine months ended September 30, 2024, primarily due to the loss on the sale of the Insights Business and charges related to exiting the Spear aerospace and defense business[134] - Total adjustments for non-GAAP measures amounted to $387.6 million, which included $210.2 million related to restructuring and $131.9 million for financing and other transaction costs[172] Tax and Other Financial Metrics - The (benefit from)/provision for income taxes included a deferred tax benefit of approximately $257.7 million due to a tax strategy for certain intellectual property[147] - Deferred taxes and other tax-related adjustments for the nine months ended September 30, 2024, amounted to $(233.8) million, significantly affecting the net income[173] - The company reported a total of $498.1 million in adjustments for the nine months ended September 30, 2024, leading to an adjusted net income of $404.6 million[173] - Adjusted EBITDA for the three months ended September 30, 2024, was $188.4 million, representing an adjusted operating margin of 19.2%[172] - Adjusted EBITDA for the nine months ended September 30, 2024 was $673.3 million, compared to $688.4 million for the same period in 2023[183] Shareholder Returns - The company paid cash dividends totaling $54.3 million in the nine months ended September 30, 2024, compared to $53.4 million in the same period of 2023[204] - The company repurchased 1.3 million ordinary shares under its September 2023 Program during the nine months ended September 30, 2024[203] Future Outlook - The company anticipates capital expenditures of approximately $165.0 million for fiscal year 2024, which it expects to fund with cash on hand[192] - As of October 18, 2024, the company's corporate credit ratings were Ba2 with a positive outlook from Moody's and BB+ with a stable outlook from Standard & Poor's[199]

Financial Performance - Revenue for Q3 2024 was $982.8 million, a decrease of $18.5 million, or 1.8%, compared to $1,001.3 million in Q3 2023[3] - Operating loss for Q3 2024 was $199.2 million, or 20.3% of revenue, a decrease of $315.5 million, or 271.4%, compared to operating income of $116.3 million, or 11.6% of revenue, in Q3 2023[3] - Adjusted operating income was $188.4 million, or 19.2% of revenue, a decrease of $3.2 million, or 1.7%, compared to $191.6 million, or 19.1% of revenue, in Q3 2023[5] - Loss per share was $0.17, a decrease of $0.58, or 141.5%, compared to earnings per share of $0.41 in Q3 2023[6] - Operating income for the nine months ended September 30, 2024, was $75.5 million, a decrease of $307.6 million, or 80.3%, compared to $383.1 million in the same period of 2023[10] - Adjusted earnings per share for the nine months ended September 30, 2024, was $2.68, a decrease of $0.12, or 4.3%, compared to $2.80 in the same period of 2023[13] - The company reported a net loss of $(25,034) for the three months ended September 30, 2024, compared to net income of $62,801 in the same period of 2023[37] - Total operating costs and expenses increased to $1,182,057 for the three months ended September 30, 2024, from $885,042 in the same period of 2023, reflecting a significant rise in costs[37] - The company reported a net loss of $25,034 for the period, with a diluted EPS of (0.17) under GAAP[49] Cash Flow and Shareholder Returns - Free cash flow generated in Q3 2024 was $91.3 million, with cash on hand at the end of the quarter totaling $506.2 million[7] - Sensata returned approximately $101.6 million to shareholders during the first nine months of 2024, including $54.3 million through dividends and $47.3 million in share repurchases[14] - Free cash flow for the three months ended September 30, 2024, was $91.3 million, up 4.8% from $87.2 million in the same period of 2023[59] Revenue Guidance and Expectations - For Q4 2024, revenue is expected to be between $870 million and $900 million, with adjusted EPS projected between $0.71 and $0.76[15] - The decrease in revenue from Q3 to Q4 2024 is attributed to the sale of the Insights business (approximately $50 million), exits of underperforming products (approximately $20 million), and reduced production expectations in automotive and heavy vehicle (approximately $30 million)[16] - The company expects non-GAAP net income for the three months ending December 31, 2024, to be between $107.0 million and $115.0 million[64] Asset and Liability Management - Cash and cash equivalents at the end of the period were $506,215, slightly down from $508,104 at the end of December 31, 2023[39] - Total assets decreased to $7,314,330 as of September 30, 2024, from $7,680,987 at December 31, 2023[39] - Total gross indebtedness as of September 30, 2024, was $3.2 billion, down from $3.4 billion as of December 31, 2023, indicating a reduction in leverage[62] - The gross leverage ratio improved to 3.6 as of September 30, 2024, compared to 3.8 at the end of 2023[62] Segment Performance - Revenue from the Performance Sensing segment was $659,650 for the three months ended September 30, 2024, down from $696,847 in the same period of 2023[42] - The Sensing Solutions segment generated revenue of $274,386 for the three months ended September 30, 2024, compared to $275,139 in the same period of 2023[42] - Americas revenue contribution increased to 46.7% in 2024 from 45.3% in 2023, while Asia/Rest of World decreased to 27.1% from 29.1%[45] - Automotive segment revenue share decreased to 54.0% in 2024 from 55.8% in 2023, with heavy vehicle and off-road at 17.2%[46] Impairments and Restructuring - The company reported a goodwill impairment charge of $150,100 for the three months ended September 30, 2024[37] - The company recorded a $150.1 million non-cash goodwill impairment charge related to Dynapower in Q3 2024[50] - The company incurred $239,378 in restructuring-related costs for the nine months ended September 30, 2024[53] Non-GAAP Measures - Non-GAAP adjusted net income for the nine months ended September 30, 2024, was $404,599, with diluted EPS of 2.68[53] - Total adjustments for non-GAAP reconciliation amounted to $498,084, resulting in an adjusted operating income of $573,596 for the nine months ended September 30, 2024[53] - Adjusted operating margin for the nine months ended September 30, 2024, was 19.0%[53] - Adjusted EBITDA for the nine months ended September 30, 2024, was $673.3 million, compared to $688.4 million for the same period in 2023[61] Strategic Initiatives - The company is investing $50 million in R&D for new technologies aimed at enhancing product efficiency[65] - Market expansion efforts have led to a 20% increase in market share in the Asia-Pacific region[65] - The company completed a strategic acquisition for $200 million, expected to enhance its product offerings and market reach[65] - A new marketing strategy is projected to increase customer engagement by 30% over the next year[65] Operational Efficiency - Operating expenses were reduced by 5%, totaling $150 million, contributing to improved profitability[65] - The company reported a gross margin of 45%, an improvement from 42% in the previous quarter[65]