We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Sensata (ST) Down 10.4% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Sensata (ST - Free Report) . Shares have lost about 10.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sensata due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Sensata Q2 Earnings & Revenues Top Estimates
Sensata reported strong second-quarter 2023 results, with the top and bottom lines surpassing the Zacks Consensus Estimate.
On an adjusted basis, the company reported earnings per share (EPS) of 97 cents compared with 83 cents reported in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of 95 cents per share.
Quarterly revenues aggregated $1,062.1 million, up 4.1% year over year. The top line beat the consensus estimate by 3.1%. Unfavorable currency changes reduced revenues by 1.4%.
Segmental Results
Performance Sensing revenues (71.3% of the total revenues) increased 3.5% year over year to $757.4 million. The Automotive sector benefited from price realization and strong market growth, partly offset by unfavorable foreign currency movement and launch delays. Segment operating income was $191.1 million compared with $179.3 million reported in the prior-year quarter.
Sensing Solutions revenues (28.7% of total revenues) were $304.7 million, up 5.5% from the year-ago quarter. The year-over-year uptick was caused by solid aerospace and industrial revenue growth. The segment’s operating income decreased to $84.2 million from $85.7 million, mainly due to the dilutive impact of acquisitions.
On Apr 1, 2023, the company established a new Insights reporting segment to be consistent with new management reporting and offer visibility to the company’s revenue growth and margin advancement. The financial results of Insights have been included in the Performance Sensing segment.
Other details
In the quarter under review, overall organic revenues were up 3.4%. The heavy vehicle off-road business witnessed a 1.8% increase in organic revenue growth. The automotive business reported organic revenue growth of 6.7%. The industrial business declined 4.7% organically. The aerospace business witnessed a 21.5% increase in organic revenues.
Total operating expenses were $944.1 million, up 7.1% compared with the prior-year quarter, primarily due to higher restructuring charges. Adjusted operating income was $205.7 million, up 6.2% compared with the year-ago quarter. The uptick was mainly caused by favorable pricing and productivity improvements, partially offset by unfavorable movements in foreign currency and the dilutive impact of acquisitions.
Adjusted EBITDA totaled $234.7 million in the quarter, up from $220.4 million in the previous year’s quarter.
Cash Flow & Liquidity
In the quarter under review, Sensata generated $115.7 million of net cash from operating activities compared with $94.5 million in the prior year. Free cash flow was $68.2 million compared with $56.1 million a year ago.
As of Jun 30, 2023, the company had $857.3 million in cash and cash equivalents and $3,770.5 million of net long-term debt compared with $1,034.1 million and $3,768.6 million, respectively, as of Mar 31, 2023.
In the quarter under review, Sensata returned $25 million to shareholders via quarterly dividends.
Guidance
Sensata provided guidance for the third quarter of 2023. For the quarter, the company expects revenues in the range of $980-$1,020 million, suggesting a decline of 4% to breakeven year over year. Adjusted operating income is expected to be between $183 and 199 million, indicating a year-over-year decline of 7% to a rise of 1%.
Adjusted EPS is estimated to be 84-94 cents, suggesting a decline of 1% to a rise of 11%. Adjusted net income is expected to be in the range of $129-143 million, suggesting a year-over-year decline of 2% to a rise of 9%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -6.08% due to these changes.
VGM Scores
At this time, Sensata has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Sensata has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Sensata (ST) Down 10.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Sensata (ST - Free Report) . Shares have lost about 10.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sensata due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Sensata Q2 Earnings & Revenues Top Estimates
Sensata reported strong second-quarter 2023 results, with the top and bottom lines surpassing the Zacks Consensus Estimate.
On an adjusted basis, the company reported earnings per share (EPS) of 97 cents compared with 83 cents reported in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of 95 cents per share.
Quarterly revenues aggregated $1,062.1 million, up 4.1% year over year. The top line beat the consensus estimate by 3.1%. Unfavorable currency changes reduced revenues by 1.4%.
Segmental Results
Performance Sensing revenues (71.3% of the total revenues) increased 3.5% year over year to $757.4 million. The Automotive sector benefited from price realization and strong market growth, partly offset by unfavorable foreign currency movement and launch delays. Segment operating income was $191.1 million compared with $179.3 million reported in the prior-year quarter.
Sensing Solutions revenues (28.7% of total revenues) were $304.7 million, up 5.5% from the year-ago quarter. The year-over-year uptick was caused by solid aerospace and industrial revenue growth. The segment’s operating income decreased to $84.2 million from $85.7 million, mainly due to the dilutive impact of acquisitions.
On Apr 1, 2023, the company established a new Insights reporting segment to be consistent with new management reporting and offer visibility to the company’s revenue growth and margin advancement. The financial results of Insights have been included in the Performance Sensing segment.
Other details
In the quarter under review, overall organic revenues were up 3.4%. The heavy vehicle off-road business witnessed a 1.8% increase in organic revenue growth. The automotive business reported organic revenue growth of 6.7%. The industrial business declined 4.7% organically. The aerospace business witnessed a 21.5% increase in organic revenues.
Total operating expenses were $944.1 million, up 7.1% compared with the prior-year quarter, primarily due to higher restructuring charges. Adjusted operating income was $205.7 million, up 6.2% compared with the year-ago quarter. The uptick was mainly caused by favorable pricing and productivity improvements, partially offset by unfavorable movements in foreign currency and the dilutive impact of acquisitions.
Adjusted EBITDA totaled $234.7 million in the quarter, up from $220.4 million in the previous year’s quarter.
Cash Flow & Liquidity
In the quarter under review, Sensata generated $115.7 million of net cash from operating activities compared with $94.5 million in the prior year. Free cash flow was $68.2 million compared with $56.1 million a year ago.
As of Jun 30, 2023, the company had $857.3 million in cash and cash equivalents and $3,770.5 million of net long-term debt compared with $1,034.1 million and $3,768.6 million, respectively, as of Mar 31, 2023.
In the quarter under review, Sensata returned $25 million to shareholders via quarterly dividends.
Guidance
Sensata provided guidance for the third quarter of 2023. For the quarter, the company expects revenues in the range of $980-$1,020 million, suggesting a decline of 4% to breakeven year over year. Adjusted operating income is expected to be between $183 and 199 million, indicating a year-over-year decline of 7% to a rise of 1%.
Adjusted EPS is estimated to be 84-94 cents, suggesting a decline of 1% to a rise of 11%. Adjusted net income is expected to be in the range of $129-143 million, suggesting a year-over-year decline of 2% to a rise of 9%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -6.08% due to these changes.
VGM Scores
At this time, Sensata has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Sensata has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.