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].

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]