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]

Core Viewpoint - The market anticipates a year-over-year decline in Sensata's earnings due to lower revenues, with the actual results being crucial for stock price movement [1][2]. Earnings Expectations - Sensata is expected to report earnings of $0.86 per share, reflecting a decline of 5.5% year-over-year, with revenues projected at $984.66 million, down 1.7% from the previous year [3]. - The earnings report is scheduled for November 4, 2024, and could lead to stock price increases if results exceed expectations, while missing estimates may result in a decline [2]. Estimate Revisions - The consensus EPS estimate has been revised down by 3.12% over the last 30 days, indicating a collective reassessment by analysts [4]. - The Most Accurate Estimate for Sensata is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.16%, suggesting a bearish outlook from analysts [10]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, particularly when combined with a favorable Zacks Rank [8]. - Sensata currently holds a Zacks Rank of 4, which complicates the prediction of an earnings beat [10]. Historical Performance - In the last reported quarter, Sensata met the consensus EPS estimate of $0.93, resulting in no surprise [11]. - Over the past four quarters, the company has beaten consensus EPS estimates twice [12]. Conclusion - Sensata does not appear to be a compelling candidate for an earnings beat, and investors should consider other factors when making decisions regarding the stock ahead of the earnings release [15].

Core Insights - Sensata Technologies Holding plc is expanding its cockpit control portfolio with the introduction of the Digital Inceptor, a lightweight and modular solution aimed at enhancing pilot controls for advanced air mobility applications [1][2] Group 1: Product Features and Innovations - The Digital Inceptor utilizes advanced micro-RVDT technology, making it the lightest passive inceptor available, and supports a range of applications including air taxis and cargo delivery [1] - It features a compact design that integrates seamlessly into various aircraft structures, with three-axis models weighing under 3.175 kilograms (7 pounds) and offering enhanced reliability through single-point-of-failure mitigation [2] - The inceptor employs a Controller Area Network (CAN) bus architecture, reducing the number of wires and simplifying the interfacing with flight control computers, which aids in the transition to electrification in aerospace [2][3] - The design includes redundant load paths and jam-resistant capabilities, ensuring safe operation, and offers flexible signal outputs in both analog and digital formats [3] Group 2: Business Outlook - Sensata's aerospace business is expected to benefit from the expansion of its cockpit control portfolio, with management projecting mid-single-digit revenue growth in 2024 for this segment [4] - However, the Sensing Solutions segment is facing challenges due to ongoing destocking, a sluggish housing construction market, and unfavorable foreign exchange rates [4] - The company is currently experiencing a high debt burden, which remains a headwind for its overall performance [4] Group 3: Stock Performance - Sensata currently holds a Zacks Rank of 4 (Sell), with its shares having lost 0.2% over the past year, contrasting with a 26.3% growth in its sub-industry [5]

Core Viewpoint - Sensata Technologies reported a decline in quarterly revenues and adjusted earnings per share, reflecting challenges in the Sensing Solutions segment and overall market conditions [1][9]. Financial Performance - Quarterly revenues totaled $1,035.5 million, down 2.5% year over year, missing consensus estimates by 0.4% [1]. - Adjusted earnings per share (EPS) for the second quarter of 2024 was 93 cents, compared to 97 cents a year ago, matching the Zacks Consensus Estimate [9]. - Total operating income increased to $129.9 million from $118 million in the previous year [13]. Segmental Results - Sensing Solutions revenues, which account for 25.9% of total revenues, were $268.1 million, down 19% year over year due to destocking, a sluggish housing market, and unfavorable foreign exchange rates [2]. - Performance Sensing revenues, making up 69.9% of total revenues, increased by 4.4% year over year to $723.9 million, driven by strong performance in automotive and heavy vehicle sectors [11]. - Other revenues, representing 4.2% of total revenues, rose 16% year over year to $43.5 million [12]. Operating Expenses and Income - Total operating expenses decreased to $905.6 million from $944 million in the prior-year quarter [3]. - Adjusted operating income was $196.7 million, a decline of 4.4% from the previous year [3]. Cash Flow and Liquidity - As of June 30, 2024, the company had $1,033 million in cash and cash equivalents and $3,170.8 million in net long-term debt, compared to $460.4 million and $3,375.5 million, respectively, as of March 31, 2024 [4]. Guidance - For the third quarter of 2024, the company projects revenues between $970 million and $1,000 million, indicating a decline of 3% to 0% [17]. - Adjusted EPS is estimated to be between 82 and 88 cents, suggesting a decline of 10% to 3% [5].

Sensata Technologies Holding plc (NYSE:ST) Q2 2024 Results Earnings Conference Call July 30, 2024 4:30 PM ET Company Participants Andrew Lynch - Vice President, Finance Martha Sullivan - Interim President and Chief Executive Officer Brian Roberts - Executive Vice President, Chief Financial Officer Conference Call Participants Joseph Leeman - Bank of America Merrill Lynch Amit Daryanani - Evercore ISI Mark Delaney - Goldman Sachs Matthew Sheerin - Stifel Financial Christopher Glynn - Oppenheimer & Co. Luke J ...

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Here is how Sensata performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Since these metrics play a crucial role in driving the top- and bottom-line numbers, co ...

A quarter ago, it was expected that this maker of sensing, electrical protection, control and power management products would post earnings of $0.86 per share when it actually produced earnings of $0.89, delivering a surprise of 3.49%. Sensata, which belongs to the Zacks Instruments - Control industry, posted revenues of $1.04 billion for the quarter ended June 2024, missing the Zacks Consensus Estimate by 0.37%. This compares to year-ago revenues of $1.06 billion. The company has topped consensus revenue e ...

Non-GAAP adjustments Many of our non-GAAP adjustments relate to a series of strategic initiatives developed by our management aimed at better positioning us for future revenue growth and an improved cost structure. These initiatives have been modified from time to time to reflect changes in overall market conditions and the competitive environment facing our business. These initiatives include, among other items, acquisitions, divestitures, restructurings of certain business, supply chain or corporate activ ...