Sensata Technologies Holding plc ST 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%.

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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.