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.
Sensata (ST) Q4 Earnings Miss Estimates, Revenues Decline Y/Y
Read MoreHide Full Article
Sensata Technologies Holding plc (ST - Free Report) reported fourth-quarter 2023 adjusted earnings per share (EPS) of 81 cents compared with 96 cents a year ago. The bottom line missed the Zacks Consensus Estimate of 86 cents.
Quarterly revenues aggregated $992.5 million, down 2.2% year over year. Unfavorable currency changes reduced revenues by 0.9%. However, the top line beat the consensus estimate by 1.4%.
Following the announcement, shares of ST plunged 8.5% and closed trading at $33.06 on Feb 6. In the past year, shares have lost 37.7% compared with the sub-industry’s growth of 2.8%.
Image Source: Zacks Investment Research
Segmental Results
Performance Sensing revenues (75.9% of total revenues) increased 0.9% year over year to $753 million. The Automotive sector benefited from market and content growth partly offset by unfavorable revenue mix and foreign currency movement. Segmental operating income was $184.4 million compared with $192.9 million in the prior-year quarter.
Sensing Solutions revenues (24.1%) were $239.5 million, down 10.7% year over year. The downtick was caused by weakness in industrial revenue growth, which offset an increase in Aerospace revenues. Industrial revenue growth was affected by inventory de-stocking, a sluggish global construction market and unfavorable forex volatility. ST expects these trends to continue in the first half of the year and start to subside in the second half of 2024.
Sensata Technologies Holding N.V. Price, Consensus and EPS Surprise
The segment’s operating income decreased to $68.2 million from $78.4 million in the prior-year quarter, mainly due to a decline in industrial revenue growth.
Other Details
In the quarter under review, overall organic revenues were down 1.3%. The heavy vehicle off-road business witnessed an increase of 1.1% in organic revenue growth. The automotive business reported organic revenue growth of 2.1%. The industrial business plunged 14.4% organically. The aerospace business witnessed an 11.8% jump in organic revenues.
Total operating expenses were $1.194 billion, up 38.5% year over year, primarily due to goodwill impairment charges. Adjusted operating income was $183.7 million, down 10.1% year over year. The downward movement was mainly caused by unfavorable product mix and movements in foreign currency, along with pricing headwinds.
Adjusted EBITDA totaled $218.2 million in the quarter, down from $244.5 million in the prior year.
Cash Flow & Liquidity
In the quarter under discussion, Sensata generated $105.1 million of net cash from operating activities compared with $224.9 million in the prior-year quarter. Free cash flow was $56.7 million compared with $185.2 million a year ago.
As of Dec 31, 2023, the company had $508.1 million in cash and cash equivalents and $3,374 million of net long-term debt compared with $889.7 million and $3,771.8 million, respectively, as of Sep 30, 2023.
In the reported quarter, Sensata returned $18.2 million to shareholders via quarterly dividends and repurchased shares worth $28.1 million.
Guidance
Sensata provided guidance for the first quarter of 2024. The company expects revenues in the range of $970-$1,010 million, suggesting growth in the range of (3)-1% from the year-ago levels. Adjusted operating income is projected to be between $178 million and 190 million, indicating a dip of 8-2% from the prior-year reading.
Adjusted EPS is estimated to be between 82 cents and 88 cents, hinting at a tumble of 11-4%. Adjusted net income is anticipated in the $124-134 million band, implying a fall of 12-5% from a year ago.
ST expects forex volatility to negatively impact its first-quarter results. The expected headwind to revenues is $7 million, 60 basis points to adjusted operating margin and 5 cents to adjusted earnings per share.
Full-year revenue growth is forecast in the range of 2-3%. Revenues will likely be flat to slightly down from the year-earlier levels in the first half owing to industrial markets witnessing a destocking pressure. Revenues in the second half of the year are expected to increase in the range of 3-5% from the prior-year actuals driven by new launches and ramping of products.
Zacks Rank
Sensata currently has a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Watts Water Technologies (WTS - Free Report) , Manhattan Associates (MANH - Free Report) and Microsoft (MSFT - Free Report) . While Manhattan Associates currently sports a Zacks Rank #1 (Strong Buy), Watts Water and Microsoft carry a Zacks Rank of 2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Watts Water Technologies’ 2023 EPS has improved by 1.1% in the past 60 days to $8.09.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have jumped 19.9% in the past year. The Zacks Consensus Estimate for MANH 2024 EPS has increased by 3.6% in the past 60 days to $3.76.
Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.6%. Shares of MANH have surged 71.4% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 earnings is pegged at $11.60 per share, indicating growth of 18.3% from the year-ago levels. Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term growth rate is pegged at 16.2%. MSFT has gained 52% in the past year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Sensata (ST) Q4 Earnings Miss Estimates, Revenues Decline Y/Y
Sensata Technologies Holding plc (ST - Free Report) reported fourth-quarter 2023 adjusted earnings per share (EPS) of 81 cents compared with 96 cents a year ago. The bottom line missed the Zacks Consensus Estimate of 86 cents.
Quarterly revenues aggregated $992.5 million, down 2.2% year over year. Unfavorable currency changes reduced revenues by 0.9%. However, the top line beat the consensus estimate by 1.4%.
Following the announcement, shares of ST plunged 8.5% and closed trading at $33.06 on Feb 6. In the past year, shares have lost 37.7% compared with the sub-industry’s growth of 2.8%.
Image Source: Zacks Investment Research
Segmental Results
Performance Sensing revenues (75.9% of total revenues) increased 0.9% year over year to $753 million. The Automotive sector benefited from market and content growth partly offset by unfavorable revenue mix and foreign currency movement. Segmental operating income was $184.4 million compared with $192.9 million in the prior-year quarter.
Sensing Solutions revenues (24.1%) were $239.5 million, down 10.7% year over year. The downtick was caused by weakness in industrial revenue growth, which offset an increase in Aerospace revenues. Industrial revenue growth was affected by inventory de-stocking, a sluggish global construction market and unfavorable forex volatility. ST expects these trends to continue in the first half of the year and start to subside in the second half of 2024.
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
The segment’s operating income decreased to $68.2 million from $78.4 million in the prior-year quarter, mainly due to a decline in industrial revenue growth.
Other Details
In the quarter under review, overall organic revenues were down 1.3%. The heavy vehicle off-road business witnessed an increase of 1.1% in organic revenue growth. The automotive business reported organic revenue growth of 2.1%. The industrial business plunged 14.4% organically. The aerospace business witnessed an 11.8% jump in organic revenues.
Total operating expenses were $1.194 billion, up 38.5% year over year, primarily due to goodwill impairment charges. Adjusted operating income was $183.7 million, down 10.1% year over year. The downward movement was mainly caused by unfavorable product mix and movements in foreign currency, along with pricing headwinds.
Adjusted EBITDA totaled $218.2 million in the quarter, down from $244.5 million in the prior year.
Cash Flow & Liquidity
In the quarter under discussion, Sensata generated $105.1 million of net cash from operating activities compared with $224.9 million in the prior-year quarter. Free cash flow was $56.7 million compared with $185.2 million a year ago.
As of Dec 31, 2023, the company had $508.1 million in cash and cash equivalents and $3,374 million of net long-term debt compared with $889.7 million and $3,771.8 million, respectively, as of Sep 30, 2023.
In the reported quarter, Sensata returned $18.2 million to shareholders via quarterly dividends and repurchased shares worth $28.1 million.
Guidance
Sensata provided guidance for the first quarter of 2024. The company expects revenues in the range of $970-$1,010 million, suggesting growth in the range of (3)-1% from the year-ago levels. Adjusted operating income is projected to be between $178 million and 190 million, indicating a dip of 8-2% from the prior-year reading.
Adjusted EPS is estimated to be between 82 cents and 88 cents, hinting at a tumble of 11-4%. Adjusted net income is anticipated in the $124-134 million band, implying a fall of 12-5% from a year ago.
ST expects forex volatility to negatively impact its first-quarter results. The expected headwind to revenues is $7 million, 60 basis points to adjusted operating margin and 5 cents to adjusted earnings per share.
Full-year revenue growth is forecast in the range of 2-3%. Revenues will likely be flat to slightly down from the year-earlier levels in the first half owing to industrial markets witnessing a destocking pressure. Revenues in the second half of the year are expected to increase in the range of 3-5% from the prior-year actuals driven by new launches and ramping of products.
Zacks Rank
Sensata currently has a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Watts Water Technologies (WTS - Free Report) , Manhattan Associates (MANH - Free Report) and Microsoft (MSFT - Free Report) . While Manhattan Associates currently sports a Zacks Rank #1 (Strong Buy), Watts Water and Microsoft carry a Zacks Rank of 2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Watts Water Technologies’ 2023 EPS has improved by 1.1% in the past 60 days to $8.09.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have jumped 19.9% in the past year.
The Zacks Consensus Estimate for MANH 2024 EPS has increased by 3.6% in the past 60 days to $3.76.
Manhattan Associates’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 27.6%. Shares of MANH have surged 71.4% in the past year.
The Zacks Consensus Estimate for Microsoft’s fiscal 2024 earnings is pegged at $11.60 per share, indicating growth of 18.3% from the year-ago levels. Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 8.8%. The long-term growth rate is pegged at 16.2%. MSFT has gained 52% in the past year.