Sensata Technologies Holding plc ST reported third-quarter 2024 adjusted earnings per share (EPS) of 86 cents compared with 91 cents a year ago. The bottom line matched the Zacks Consensus Estimate.

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Revenues for the quarter reached $982.8 million, down 1.8% from a year ago.  The top line missed the consensus estimate by 0.2%. 

Segmental Results

Performance Sensing revenues (67.1% of total revenues) fell 5.3% year over year to $659.7 million. The top line fell mainly due to local original equipment manufacturers (OEMs) gaining market share from multinational companies in China, partially offset by growth in the Heavy Vehicle & Off Road sector, particularly in North American and European on-road trucks. Segmental adjusted operating income was $161.9 million compared with $177.6 million in the prior-year quarter.

Sensata Technologies Holding N.V. Price and Consensus

Sensata Technologies Holding N.V. price-consensus-chart | Sensata Technologies Holding N.V. Quote

Sensing Solutions revenues (27.9%) were $274.4 million, down 0.3% from the previous year. The considerable year-over-year decrease was due to continued destocking and a sluggish housing construction market adversely impacting the industrial sector. However, the company anticipates future growth, particularly with its A2L leak detection sensor, which is gaining traction in a growing market. Moreover, Sensata's Dynapower business recently received approval for its fifth-generation compact power systems, providing dual-purpose performance for hydrogen production and fuel cells. Segmental adjusted operating income was $81 million compared with $80.7 million in the prior-year quarter.

Other revenues (5%) were $48.8 million, up 66.4% from the prior-year period.

Other Details

Total operating loss was $199.2 million against operating income of $116.3 million in the year-ago quarter. This loss is attributed to a $150 million good will impairment charge for the Dynapower business, $141 million in restructuring expenses linked to the sale of the Insights business and product exits and $27 million in costs tied to product lifecycle management.

Total operating expenses were $1182.1 million, up from $885 million reported in the prior-year quarter. Adjusted operating income was $188.4 million, declining 1.7% year over year.

Adjusted EBITDA totaled $217.6 million in the quarter, down from $228.3 million in the previous year’s quarter.

Cash Flow & Liquidity

During the quarter, Sensata generated $130.9 million of net cash from operating activities compared with $138.9 million in the prior-year quarter. Free cash flow was $91.3 million compared with $87.2 million a year ago.

As of Sept. 30, 2024, the company had $506.2 million in cash and cash equivalents and $3,174.4 of net long-term debt compared with $1,033 million and $3,170.8 million, respectively, as of June 30, 2024.

In the third quarter of 2024, Sensata returned approximately $55.4 million to shareholders, which included $37.2 million spent on repurchasing shares and $18.1 million paid out in dividends of 12 cents per share, on Aug. 28, 2024.

Guidance

Sensata has revised its guidance for the fourth quarter of 2024. This can be attributed to the  $50 million sale of the Insights business in the third quarter, the exit of underperforming products totaling about $20 million and reduced production forecasts in the automotive and heavy vehicle industries with OEMs managing rising inventory levels.

For the quarter, the company projects revenues in the band of $870-$900 million, indicating a decline of 11-8%. Adjusted operating income is expected to be $167.2-$175.2 million, implying a year-over-year decrease of 11% to 7%.

Adjusted EPS is estimated to be 71-76 cents, suggesting a decline of 17-12%. Adjusted net income is anticipated in the $107-$115 million range, indicating a decrease of 18% to 12%.

Zacks Rank

Sensata currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Some Other Companies in Tech Space

Badger Meter, Inc. BMI reported EPS of $1.08 for the third quarter of 2024, beating the Zacks Consensus Estimate by 5.9%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of 88 cents.

Iridium Communications IRDM reported earnings per share of 21 cents for the third quarter of 2024, beating the Zacks Consensus Estimate by 5%. The company incurred a loss of 1 cent per share in the prior-year quarter. 

Seagate Technology Holdings plc STX reported first-quarter fiscal 2025 non-GAAP earnings of $1.58 per share, beating the Zacks Consensus Estimate by 6.8%. Non-GAAP revenues of $2.168 billion beat the Zacks Consensus Estimate by 2.4%. The figure increased 49% on a year-over-year basis.

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