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Sensata (ST) Up 2.3% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Sensata (ST - Free Report) . Shares have added about 2.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sensata due for a pullback? 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 Q3 Earnings Beat Estimates
Sensata reported third-quarter 2023 adjusted earnings per share (EPS) of 91 cents compared with 85 cents reported a year ago. The bottom line surpassed the Zacks Consensus Estimate of 90 cents.
Quarterly revenues aggregated $1,001.3 million, down 1.7% year over year. The top line missed the consensus estimate by 0.2%. Unfavorable currency changes reduced revenues by 1%.
Segmental Results
Performance Sensing revenues (75.3% of total revenues) increased 2% year over year to $754 million. The Automotive sector benefited from content growth and price realization partly offset by unfavorable revenue mix and foreign currency movement. Segmental operating income was $186 million compared with $181.9 million in the prior-year quarter.
Sensing Solutions revenues (24.7%) were $247.3 million, down 11.3% from the previous year. The year-over-year downtick was caused by a weakness in industrial revenue growth, which offset increases in Aerospace revenues. Industrial revenue growth was affected by softness in HVAC, appliance, IT & telecom markets, and unfavorable forex volatility. The segment’s operating income decreased to $71.3 million from $80.3 million, mainly due to decline in industrial revenue growth.
Other details
In the quarter under review, overall organic revenues were down 0.7%. The heavy vehicle off-road business witnessed a 3.8% decline in organic revenue growth. The automotive business reported organic revenue growth of 5.9%. The industrial business plunged 17.1% organically. The aerospace business witnessed a 28.7% jump in organic revenues.
Total operating expenses were $885.04 million, up 15.6% compared with the prior-year quarter, primarily due to higher restructuring charges. Adjusted operating income was $191.6 million, down 2.9% compared with the earlier year. The downward movement was mainly caused by lower revenues and unfavorable movements in foreign currency partly offset by higher productivity and favorable pricing.
Adjusted EBITDA totaled $228.3 million in the quarter, up from $224.2 million in the previous year.
Cash Flow & Liquidity
In the quarter under discussion, Sensata generated $138.9 million of net cash from operating activities compared with $93.8 million in the prior-year quarter.
Free cash flow was $87.2 million compared with $57.5 million a year ago.
As of Sep 30, 2023, the company had $889.7 million in cash and cash equivalents and $3,771.8 million of net long-term debt compared with $857.3 million and $3,770.5 million, respectively, as of Jun 30, 2023.
In the reported quarter, Sensata returned $18.3 million to shareholders via quarterly dividends and repurchased shares worth $35.2 million.
Guidance
Sensata provided guidance for the fourth quarter of 2023. The company expects revenues in the range of $950-$1,000 million, suggesting a decline of 6-1% year over year. Adjusted operating income is projected to be between $176 million and 194 million, indicating a year-over-year dip of 14.
Adjusted EPS is estimated to be 79-89 cents, hinting at a tumble of 18. Adjusted net income is anticipated in the $120-136 million band, implying a year-over-year fall of 18-7%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -10.23% due to these changes.
VGM Scores
Currently, Sensata has a subpar Growth Score of D, a grade with the same score on the momentum front. However, 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 C. 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.
Performance of an Industry Player
Sensata is part of the Zacks Instruments - Control industry. Over the past month, Badger Meter (BMI - Free Report) , a stock from the same industry, has gained 5.8%. The company reported its results for the quarter ended September 2023 more than a month ago.
Badger Meter reported revenues of $186.19 million in the last reported quarter, representing a year-over-year change of +25.8%. EPS of $0.88 for the same period compares with $0.61 a year ago.
For the current quarter, Badger Meter is expected to post earnings of $0.76 per share, indicating a change of +26.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.9% over the last 30 days.
Badger Meter has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Sensata (ST) Up 2.3% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Sensata (ST - Free Report) . Shares have added about 2.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sensata due for a pullback? 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 Q3 Earnings Beat Estimates
Sensata reported third-quarter 2023 adjusted earnings per share (EPS) of 91 cents compared with 85 cents reported a year ago. The bottom line surpassed the Zacks Consensus Estimate of 90 cents.
Quarterly revenues aggregated $1,001.3 million, down 1.7% year over year. The top line missed the consensus estimate by 0.2%. Unfavorable currency changes reduced revenues by 1%.
Segmental Results
Performance Sensing revenues (75.3% of total revenues) increased 2% year over year to $754 million. The Automotive sector benefited from content growth and price realization partly offset by unfavorable revenue mix and foreign currency movement. Segmental operating income was $186 million compared with $181.9 million in the prior-year quarter.
Sensing Solutions revenues (24.7%) were $247.3 million, down 11.3% from the previous year. The year-over-year downtick was caused by a weakness in industrial revenue growth, which offset increases in Aerospace revenues. Industrial revenue growth was affected by softness in HVAC, appliance, IT & telecom markets, and unfavorable forex volatility. The segment’s operating income decreased to $71.3 million from $80.3 million, mainly due to decline in industrial revenue growth.
Other details
In the quarter under review, overall organic revenues were down 0.7%. The heavy vehicle off-road business witnessed a 3.8% decline in organic revenue growth. The automotive business reported organic revenue growth of 5.9%. The industrial business plunged 17.1% organically. The aerospace business witnessed a 28.7% jump in organic revenues.
Total operating expenses were $885.04 million, up 15.6% compared with the prior-year quarter, primarily due to higher restructuring charges. Adjusted operating income was $191.6 million, down 2.9% compared with the earlier year. The downward movement was mainly caused by lower revenues and unfavorable movements in foreign currency partly offset by higher productivity and favorable pricing.
Adjusted EBITDA totaled $228.3 million in the quarter, up from $224.2 million in the previous year.
Cash Flow & Liquidity
In the quarter under discussion, Sensata generated $138.9 million of net cash from operating activities compared with $93.8 million in the prior-year quarter.
Free cash flow was $87.2 million compared with $57.5 million a year ago.
As of Sep 30, 2023, the company had $889.7 million in cash and cash equivalents and $3,771.8 million of net long-term debt compared with $857.3 million and $3,770.5 million, respectively, as of Jun 30, 2023.
In the reported quarter, Sensata returned $18.3 million to shareholders via quarterly dividends and repurchased shares worth $35.2 million.
Guidance
Sensata provided guidance for the fourth quarter of 2023. The company expects revenues in the range of $950-$1,000 million, suggesting a decline of 6-1% year over year. Adjusted operating income is projected to be between $176 million and 194 million, indicating a year-over-year dip of 14.
Adjusted EPS is estimated to be 79-89 cents, hinting at a tumble of 18. Adjusted net income is anticipated in the $120-136 million band, implying a year-over-year fall of 18-7%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -10.23% due to these changes.
VGM Scores
Currently, Sensata has a subpar Growth Score of D, a grade with the same score on the momentum front. However, 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 C. 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.
Performance of an Industry Player
Sensata is part of the Zacks Instruments - Control industry. Over the past month, Badger Meter (BMI - Free Report) , a stock from the same industry, has gained 5.8%. The company reported its results for the quarter ended September 2023 more than a month ago.
Badger Meter reported revenues of $186.19 million in the last reported quarter, representing a year-over-year change of +25.8%. EPS of $0.88 for the same period compares with $0.61 a year ago.
For the current quarter, Badger Meter is expected to post earnings of $0.76 per share, indicating a change of +26.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.9% over the last 30 days.
Badger Meter has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.