Sensata Technologies Reports Third Quarter 2023 Financial Results

SWINDON, England–(BUSINESS WIRE)–Sensata Technologies (NYSE: ST), a global industrial technology company and leading provider of sensors, sensor-rich solutions and electrical protection devices used in mission-critical systems that create valuable business insights for customers, today announced financial results for its third quarter ended September 30, 2023.

“Sensata’s results in the third quarter were in line with our guidance and reflect our commitment to deliver as we transition with our customers to widespread Electrification. Sensata remains on track to achieve its long-term growth goals, including scaling its Electrification business to $2 billion in revenue by 2026,” said Jeff Cote, CEO and President of Sensata.  “Our ability to innovate and problem-solve across our rich history, as highlighted in our investor day last month, supports our commitment to our focused strategy on improving margins and delivering solutions for our customers in an increasingly electrified world.”

Operating Results – Third Quarter

Operating results for the third quarter of 2023 compared to the third quarter of 2022 are summarized below. These results include non-GAAP financial measures, each of which is defined and reconciled to the most directly comparable GAAP measure later in this press release.

Revenue:

• Revenue was $1,001.3 million, a decrease of $17.0 million, or (1.7%), compared to $1,018.3 million in the third quarter of 2022.

• Revenue decreased (0.7%) on an organic basis, which excludes a decrease of (1.0%) from foreign currency exchange rates versus the prior year period.

Operating income:

• Operating income was $116.3 million, or 11.6% of revenue, a decrease of $136.6 million, or (54.0%), compared to operating income of $252.9 million, or 24.8% of revenue, in the third quarter of 2022. The third quarter of 2022 included a one-time gain of $135.1 million related to the sale of the Qinex business.

• Adjusted operating income was $191.6 million, or 19.1% of revenue (20.3% on a constant currency basis), a decrease of $5.7 million, or (2.9%), compared to adjusted operating income of $197.3 million, or 19.4% of revenue, in the third quarter of 2022.

Earnings per share:

• Earnings per share was $0.41, a decrease of $0.50, or (54.9%), compared to earnings per share of $0.91 in the third quarter of 2022.

• Adjusted earnings per share was $0.91, an increase of $0.06, or 7.1% ($0.99 or an increase of 16.5% on a constant currency basis), compared to adjusted earnings per share of $0.85 in the third quarter of 2022.

Sensata generated $138.9 million of operating cash flow in the third quarter of 2023, compared to $93.8 million in the prior year period. Sensata’s free cash flow totaled $87.2 million in the third quarter of 2023 compared to $57.5 million in the prior year period.

During the third quarter of 2023, Sensata returned approximately $18.3 million to shareholders through its quarterly dividend of $0.12 per share paid on August 23, 2023, and repurchased shares valued at approximately $35.2 million.

Operating Results – Nine Months

Operating results for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 are summarized below. These results include non-GAAP financial measures, each of which is defined and reconciled to the most directly comparable GAAP measure later in this press release.

Revenue:

• Revenue was $3,061.6 million, an increase of $47.0 million, or 1.6%, compared to $3,014.6 million in the nine months ended September 30, 2022.

• Revenue increased 2.4% on an organic basis, which excludes a decrease of (1.5%) from foreign currency exchange rates and an increase of 0.7% from acquisitions, net of divestitures, each versus the prior year.

Operating income:

• Operating income was $383.1 million, or 12.5% of revenue, a decrease of $134.7 million, or (26.0%), compared to operating income of $517.8 million, or 17.2% of revenue, in the nine months ended September 30, 2022. The nine months ended September 30, 2022 included a one-time gain of $135.1 million related to the sale of the Qinex business.

• Adjusted operating income was $590.3 million, or 19.3% of revenue (19.9% on a constant currency basis), an increase of $16.7 million, or 2.9%, compared to adjusted operating income of $573.6 million, or 19.0% of revenue, in the nine months ended September 30, 2022.

Earnings per share:

• Earnings per share was $1.30, an increase of $0.04, or 3.2%, compared to earnings per share of $1.26 in the nine months ended September 30, 2022.

• Adjusted earnings per share was $2.80, an increase of $0.35, or 14.3% ($2.97 or an increase of 21.2% on a constant currency basis), compared to adjusted earnings per share of $2.45 in the nine months ended September 30, 2022.

Sensata generated $351.6 million of operating cash flow in the nine months ended September 30, 2023, compared to $235.7 million in the prior year period. Sensata’s free cash flow totaled $215.4 million in the nine months ended September 30, 2023 compared to $125.3 million in the prior year period.

During the first nine months of 2023, Sensata repaid its variable rate Term Loan, returned approximately $53.4 million to shareholders through its quarterly dividend, and repurchased shares valued at approximately $60.3 million.

Segment Performance

		For the three months ended September 30,								For the nine months ended September 30,
$ in 000s			2023				2022				2023				2022
Performance Sensing (1)
Revenue		$	753,988			$	739,449			$	2,249,700			$	2,173,789
Operating income		$	186,006			$	181,931			$	559,893			$	535,438
% of Performance Sensing revenue			24.7	%			24.6	%			24.9	%			24.6	%
Sensing Solutions (1)
Revenue		$	247,314			$	278,819			$	811,889			$	840,797
Operating income		$	71,345			$	80,251			$	230,813			$	244,904
% of Sensing Solutions revenue			28.8	%			28.8	%			28.4	%			29.1	%

(1)

Effective April 1, 2023, we reorganized our reportable segments to move material handling products from Performance Sensing to Sensing Solutions to align with new management reporting. Prior year amounts have been reclassified

Guidance

“We are adjusting our fourth quarter guidance to reflect updated third party estimates for automotive production in the quarter due to the UAW strike. While the strike’s impact is likely temporary, its impact on our results may vary from current expectations,” said Paul Vasington, EVP and CFO of Sensata. “For the fourth quarter of 2023, we now expect revenue of $950 to $1,000 million and adjusted EPS of $0.79 to $0.89.”

Q4-2023 Guidance
$ in millions, except EPS	Q4-23 Guidance	Q4-22	Y/Y Change
Revenue	$950 – $1,000	$1,014.7	(6%) – (1%)
organic growth			(5%) – 0%
Adjusted Operating Income	$176 – $194	$204.3	(14%) – (5%)
Adjusted Net Income	$120 – $136	$146.5	(18%) – (7%)
Adjusted EPS	$0.79 – $0.89	$0.96	(18%) – (7%)

Versus the prior year period, Sensata expects that changes in foreign currency exchange rates will decrease revenue by approximately ($11) million at the midpoint and decrease adjusted EPS by approximately ($0.09) at the midpoint in the fourth quarter of 2023.

CFO Transition

Separately today, Sensata announced that Paul Vasington, EVP and CFO, has decided to retire and will be stepping down from these roles following the publication of the third quarter 10-Q in early November, and that Brian Roberts has been appointed to begin serving as EVP and CFO of Sensata as of that date. Mr. Vasington will remain an advisor to Sensata until April 2024 to ensure a smooth transition.

Conference Call and Webcast

Sensata will conduct a conference call today at 8:00 a.m. Eastern Time to discuss its third quarter 2023 financial results and its outlook for the fourth quarter of 2023. The dial-in numbers for the call are 1-844-784-1726 or 1-412-380-7411. Callers should reference the “Sensata Q3 2023 Financial Results Conference Call.” A live webcast of the conference call will also be available on the investor relations page of Sensata’s website at http://investors.sensata.com. Additionally, a replay of the call will be available until November 7, 2023. To access the replay, dial 1-877-344-7529 or 1-412-317-0088 and enter confirmation code: 1055825.

About Sensata Technologies

Sensata Technologies is a leading industrial technology company that develops sensors, sensor-based solutions, including controllers and software, and other mission-critical products to create valuable business insights for customers and end users. For more than 100 years, Sensata has provided a wide range of customized, sensor-rich solutions that address complex engineering requirements to help customers solve difficult challenges in the automotive, heavy vehicle & off-road, industrial, and aerospace industries. With approximately 21,000 employees and operations in 16 countries, Sensata’s solutions help to make products safer, cleaner and more efficient, more electrified, and more connected. For more information, please visit Sensata’s website at