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Sensata's Q3 Earnings Surpass Estimates, Revenues Decrease Y/Y

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Key Takeaways

  • Sensata posted Q3 EPS of $0.89, up 4.7% above estimates, on revenue of $932M, down 5.2% year over year.
  • Sensing Solutions rose 0.2% on A2L leak detection and Aerospace gains, offsetting truck production weakness.
  • The company generated $136.2M in free cash flow and returned $17.5M to shareholders via dividends.

Sensata Technologies Holding plc (ST - Free Report) reported third-quarter 2025 adjusted earnings per share (EPS) of 89 cents, flat year over year. However, the bottom line topped the Zacks Consensus Estimate by 4.7%.

Revenues for the quarter reached $932 million, down 5.2% from a year ago. The top-line contraction was attributable to earlier announced divestitures and product lifecycle optimization efforts. However, the figure outperformed management’s expectations ($900-$930 million) and beat the consensus estimate by 1.9%. Strength in Sensing Solutions cushioned the top-line performance.

Following the announcement, shares of ST inched up around 3% in the after-market trading session yesterday. In the past year, shares have lost 11.8% against the Instruments-Control industry’s growth of 9%.

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Segmental Results of Sensata

Performance Sensing revenues (70.5% of total revenues) decreased 0.4% year over year to $656.9 million. The top line was affected by lower on-road truck production, partially offset by market outgrowth in Auto and HVOR.

Segmental adjusted operating income was $155.6 million compared with $145.7 million in the prior-year quarter.

Sensing Solutions’ revenues (29.5%) were $275 million, up 0.2% year over year. This was the third consecutive quarter of year-over-year growth, fueled by gains in A2L leak detection and the Aerospace segment.

Segmental adjusted operating income was $85.1 million compared with $80.8 million in the prior-year quarter.

Other Details of Sensata's Q3

Adjusted operating income was $179.6 million compared with $188.4 million in the year-ago quarter. Adjusted operating margin expanded 10 basis points to 19.3%.

Adjusted EBITDA totaled $212.1 million in the quarter, declining from $223 million in the previous-year quarter.

Total operating expenses were $1,054.9 million, down 10.8% year over year.

ST’s Cash Flow & Liquidity

In the quarter under discussion, Sensata generated $159.9 million of net cash from operating activities compared with $130.9 million in the prior-year quarter. Free cash flow was $136.2 million compared with $91.3 million a year ago.

As of Sept. 30, 2025, the company had $791.3 million in cash and cash equivalents and $3,181.4 million of net long-term debt compared with $661.8 million and $3,178.5 million, respectively, as of June 30, 2025.

In the third quarter of 2025, Sensata returned approximately $17.5 million to shareholders through quarterly dividends of 12 cents per share paid on Aug. 27, 2025.

Sensata’s Q4 Outlook

For the fourth quarter, the company projects revenues in the band of $890-$920 million, indicating a decrease of 5% to 1%, sequentially. This includes approximately $12 million related to anticipated tariff recoveries from customers.

Adjusted operating income is expected to be $172-$179 million, implying a decline of 4% to no change, sequentially.

On a sequential basis, adjusted EPS is estimated to be 83-87 cents, suggesting a decrease of 7% to 2%, sequentially. Adjusted net income is anticipated in the $121-$127 million range, indicating stable performance to a decline of 7% to 2%, sequentially.

ST’s Zacks Rank

Sensata currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performances of Other Firms

Iridium Communications (IRDM - Free Report) reported EPS of 35 cents for the third quarter of 2025, beating the Zacks Consensus Estimate by 35%. The bottom line compared favorably with the prior-year quarter's figure of 21 cents. Iridium reported quarterly revenues of $226.9 million, a 7% increase year over year, driven by continued strength in Service revenue and Equipment and Engineering/Support sales. The consensus estimate was $224.05 million.

SAP SE (SAP - Free Report) reported third-quarter 2025 non-IFRS earnings of €1.59 ($1.86) per share, climbing 29% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.69. Driven by robust cloud growth, disciplined cost control and expanding AI capabilities, SAP reported total revenues on a non-IFRS basis of €9.08 billion ($10.6 billion), representing a 7% year-over-year increase (up 11% at constant currency or cc). The Zacks Consensus Estimate was pegged at $10.56 billion.

Badger Meter, Inc. (BMI - Free Report) reported EPS of $1.19 for third-quarter 2025, which surpassed the Zacks Consensus Estimate by 7.2%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of $1.08. Quarterly net sales were $235.7 million, up 13.1% from $208.4 million in the year-ago quarter, driven by higher utility water sales. The Zacks Consensus Estimate was pegged at $229.4 million.

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