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Sensata (ST) Q3 Earnings Miss Estimates, Revenues Up Y/Y
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Sensata Technologies Holding plc (ST - Free Report) reported tepid third-quarter 2022 results, with only the top line surpassing the Zacks Consensus Estimate.
On an adjusted basis, the company reported earnings of 85 cents per share compared with 87 cents reported in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of 86 cents per share.
Sensata Technologies Holding N.V. Price, Consensus and EPS Surprise
Quarterly revenues aggregated $1.02 billion, up 7.1% year over year. The top line beat the consensus estimate by 1.1%. Acquisitions acted as tailwinds, but unfavorable currency changes reduced revenues by 3.3%.
Following the quarterly announcement, Sensata’s shares lost 5.19% and closed at $39.46 on Oct 25. In the past year, ST has lost 27.9% compared with the industry’s decline of 19.3%.
Image Source: Zacks Investment Research
Segmental Results
Performance Sensing revenues (74.1% of the total revenues) increased 6.8% year over year to $754.5 million. The Automotive sector benefited from new product launches, price realization and strong market growth partly offset by unfavorable foreign currency movement. Segment operating income was $188.6 million compared with $193.7 million reported in the prior-year quarter. The operating income fell year over year due to increased supply-chain constraints, unfavorable foreign currency movement and a negative impact from customer mix and acquisitions.
Sensing Solutions revenues (25.9% of total revenues) were $263.7 million, up 7.8% from the year-ago quarter. The year-over-year improvement was led by the latest electrification launches and revenues from acquisitions partially offset by unfavorable foreign currency movement.
The segment’s operating income decreased to $73.6 million from $75.3 million, mainly due to inflation-induced higher logistics and material costs, increased supply-chain constraints and the dilutive impact of acquisitions.
Other details
In the quarter under review, overall organic revenues were up 7.1%. The heavy vehicle off-road business witnessed a 3.4% decline in organic revenue growth. The automotive business reported organic revenue growth of 11.9%. The industrial business rose 6.4% organically. The aerospace business witnessed a 10% increase in organic revenues.
Total operating expenses were $765.4 million, down 3.1% compared with the prior-year quarter, primarily due to lower restructuring charges. Adjusted operating income was $197.3 million, down 1.8% compared with the year-ago quarter. The downtick was mainly caused by the divestiture of Connects semiconductor test and thermal business, investment in Megatrends of Electrification and Insights, unfavorable foreign currency movement and customer mix.
Adjusted EBITDA totaled $224.2 million in the quarter, down from $229.6 million in the previous year’s quarter.
Cash Flow & Liquidity
In the quarter under review, Sensata generated $93.8 million of net cash from operating activities compared with $125.3 million in the prior year. Free cash flow was $57.5 million compared with $88.5 million a year ago.
As of Sep 30, 2022, the company had $1,103.9 million in cash and cash equivalents, with $4,208.7 million of net long-term debt compared with $1,558.6 million and $4,213.5 million, respectively, as of Jun 30, 2022.
In the quarter under review, Sensata repurchased shares worth $97.6 million.
Guidance
Sensata provided guidance for the fourth quarter of 2022. For the quarter, the company expects revenues of $980-$1,020 million, suggesting a rise of 5-9% year over year. Adjusted operating income is expected to be $193-205 million, indicating a year-over-year decline of 2% to a rise of 4%.
Adjusted earnings per share are estimated to be 85-91 cents, suggesting a decline of 2% to a rise of 5%. Adjusted net income is expected to be $130-140 million, suggesting a year-over-year decline of 7% to a rise of 1%.
Zacks Rank & Stocks to Consider
Sensata currently has a Zacks Rank #3 (Hold)
Some better-ranked stocks from the broader technology space are InterDigital (IDCC - Free Report) , Pure Storage (PSTG - Free Report) and Aspen Technology (AZPN - Free Report) . Pure Storage and InterDigital currently sport a Zacks Rank #1 (Strong Buy), whereas Aspen Technology presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
The Zacks Consensus Estimate for InterDigital’s 2022 earnings is pegged at $2.45 per share, up 2.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
InterDigital’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 81.9%. Shares of IDCC have decreased 27.9% in the past year.
The Zacks Consensus Estimate for PSTG 2022 earnings is pegged at $1.18 per share, rising 24.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 35.5%.
Pure Storage’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 171.8%. Shares of PSTG have increased 8.6% in the past year.
The Zacks Consensus Estimate for Aspen Technology’s fiscal 2023 earnings is pegged at $6.77 per share, increasing 0.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.2%.
Aspen Technology’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 6.2%. Shares of AZPN have increased 61.3% in the past year.
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Sensata (ST) Q3 Earnings Miss Estimates, Revenues Up Y/Y
Sensata Technologies Holding plc (ST - Free Report) reported tepid third-quarter 2022 results, with only the top line surpassing the Zacks Consensus Estimate.
On an adjusted basis, the company reported earnings of 85 cents per share compared with 87 cents reported in the year-ago quarter. The bottom line missed the Zacks Consensus Estimate of 86 cents per share.
Sensata Technologies Holding N.V. Price, Consensus and EPS Surprise
Sensata Technologies Holding N.V. price-consensus-eps-surprise-chart | Sensata Technologies Holding N.V. Quote
Quarterly revenues aggregated $1.02 billion, up 7.1% year over year. The top line beat the consensus estimate by 1.1%. Acquisitions acted as tailwinds, but unfavorable currency changes reduced revenues by 3.3%.
Following the quarterly announcement, Sensata’s shares lost 5.19% and closed at $39.46 on Oct 25. In the past year, ST has lost 27.9% compared with the industry’s decline of 19.3%.
Image Source: Zacks Investment Research
Segmental Results
Performance Sensing revenues (74.1% of the total revenues) increased 6.8% year over year to $754.5 million. The Automotive sector benefited from new product launches, price realization and strong market growth partly offset by unfavorable foreign currency movement. Segment operating income was $188.6 million compared with $193.7 million reported in the prior-year quarter. The operating income fell year over year due to increased supply-chain constraints, unfavorable foreign currency movement and a negative impact from customer mix and acquisitions.
Sensing Solutions revenues (25.9% of total revenues) were $263.7 million, up 7.8% from the year-ago quarter. The year-over-year improvement was led by the latest electrification launches and revenues from acquisitions partially offset by unfavorable foreign currency movement.
The segment’s operating income decreased to $73.6 million from $75.3 million, mainly due to inflation-induced higher logistics and material costs, increased supply-chain constraints and the dilutive impact of acquisitions.
Other details
In the quarter under review, overall organic revenues were up 7.1%. The heavy vehicle off-road business witnessed a 3.4% decline in organic revenue growth. The automotive business reported organic revenue growth of 11.9%. The industrial business rose 6.4% organically. The aerospace business witnessed a 10% increase in organic revenues.
Total operating expenses were $765.4 million, down 3.1% compared with the prior-year quarter, primarily due to lower restructuring charges. Adjusted operating income was $197.3 million, down 1.8% compared with the year-ago quarter. The downtick was mainly caused by the divestiture of Connects semiconductor test and thermal business, investment in Megatrends of Electrification and Insights, unfavorable foreign currency movement and customer mix.
Adjusted EBITDA totaled $224.2 million in the quarter, down from $229.6 million in the previous year’s quarter.
Cash Flow & Liquidity
In the quarter under review, Sensata generated $93.8 million of net cash from operating activities compared with $125.3 million in the prior year. Free cash flow was $57.5 million compared with $88.5 million a year ago.
As of Sep 30, 2022, the company had $1,103.9 million in cash and cash equivalents, with $4,208.7 million of net long-term debt compared with $1,558.6 million and $4,213.5 million, respectively, as of Jun 30, 2022.
In the quarter under review, Sensata repurchased shares worth $97.6 million.
Guidance
Sensata provided guidance for the fourth quarter of 2022. For the quarter, the company expects revenues of $980-$1,020 million, suggesting a rise of 5-9% year over year. Adjusted operating income is expected to be $193-205 million, indicating a year-over-year decline of 2% to a rise of 4%.
Adjusted earnings per share are estimated to be 85-91 cents, suggesting a decline of 2% to a rise of 5%. Adjusted net income is expected to be $130-140 million, suggesting a year-over-year decline of 7% to a rise of 1%.
Zacks Rank & Stocks to Consider
Sensata currently has a Zacks Rank #3 (Hold)
Some better-ranked stocks from the broader technology space are InterDigital (IDCC - Free Report) , Pure Storage (PSTG - Free Report) and Aspen Technology (AZPN - Free Report) . Pure Storage and InterDigital currently sport a Zacks Rank #1 (Strong Buy), whereas Aspen Technology presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
The Zacks Consensus Estimate for InterDigital’s 2022 earnings is pegged at $2.45 per share, up 2.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
InterDigital’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 81.9%. Shares of IDCC have decreased 27.9% in the past year.
The Zacks Consensus Estimate for PSTG 2022 earnings is pegged at $1.18 per share, rising 24.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 35.5%.
Pure Storage’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 171.8%. Shares of PSTG have increased 8.6% in the past year.
The Zacks Consensus Estimate for Aspen Technology’s fiscal 2023 earnings is pegged at $6.77 per share, increasing 0.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.2%.
Aspen Technology’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 6.2%. Shares of AZPN have increased 61.3% in the past year.