Sensata(US:ST)2024-11-04 21:04Financial 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]