Latest news with #SensingSolutions
Yahoo
30-06-2025
- Business
- Yahoo
5 Revealing Analyst Questions From Sensata Technologies's Q1 Earnings Call
Sensata Technologies' first quarter results drew a positive market response, with management attributing performance to operational initiatives and effective tariff risk management. CEO Stephan von Schuckmann highlighted the company's focus on standardizing production systems across its manufacturing sites and advancing supply chain integration, noting these steps as key to offsetting market headwinds. The removal of low-growth products and improved inventory management also played roles, while the Sensing Solutions segment returned to growth, buoyed by new product introductions. Von Schuckmann commented, 'We are now continuously benchmarking Sensata internally and externally to remain the supplier of choice for our customers, affording us the opportunity to win new business and gain share.' Is now the time to buy ST? Find out in our full research report (it's free). Revenue: $911.3 million vs analyst estimates of $880.7 million (9.5% year-on-year decline, 3.5% beat) Adjusted EPS: $0.78 vs analyst estimates of $0.72 (8.3% beat) Adjusted EBITDA: $200.2 million vs analyst estimates of $196.3 million (22% margin, 2% beat) Revenue Guidance for Q2 CY2025 is $925 million at the midpoint, above analyst estimates of $906.3 million Adjusted EPS guidance for Q2 CY2025 is $0.83 at the midpoint, above analyst estimates of $0.78 Operating Margin: 13.4%, in line with the same quarter last year Inventory Days Outstanding: 94, up from 89 in the previous quarter Market Capitalization: $4.38 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Wamsi Mohan (Bank of America) asked about the $20–30 million quarterly revenue impact in the second half. CFO Brian Roberts clarified it is almost entirely due to production cuts, not outgrowth or other trends. Mark Delaney (Goldman Sachs) questioned the scale of recent customer wins in Asia. CEO Stephan von Schuckmann described them as growing but still small to medium, with potential to ramp over time. Joe Giordano (TD Cowen) inquired how Sensata maintains margin confidence amid lower U.S. volumes. Roberts pointed to operational productivity, procurement discipline, and benefits from recent restructuring. Samik Chatterjee (JPMorgan) asked about the risk of delays in heavy truck and industrial markets. Roberts acknowledged worsening outlook in heavy vehicles but described industrial demand as stable, with the caveat of ongoing tariff uncertainty. Kosta Tasoulis (Wells Fargo) asked about remaining levers for free cash flow improvement. Von Schuckmann and Roberts cited further inventory optimization and benchmarking against peers as ongoing opportunities. In future quarters, the StockStory team will watch (1) the pace of margin expansion from standardized production and procurement strategies, (2) Sensata's ability to offset automotive volume declines with growth from Sensing Solutions and new product wins, and (3) the evolution of global tariff policies and their impact on customer demand. Progress in inventory management and operational resilience will also be important markers. Sensata Technologies currently trades at $29.96, up from $22.47 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
Yahoo
12-02-2025
- Business
- Yahoo
Sensata Technologies Holding PLC (ST) Q4 2024 Earnings Call Highlights: Surpassing Revenue ...
Revenue (Q4 2024): $908 million, exceeding guidance range of $870 million to $900 million. Revenue (Full Year 2024): $3.93 billion, a 3% decrease from $4.05 billion in 2023. Adjusted Operating Margin (Q4 2024): 19.3%, up 80 basis points from 18.5% in Q4 2023. Adjusted Operating Income (Full Year 2024): $749 million, representing a margin of 19%. Adjusted Earnings Per Share (Q4 2024): $0.76, compared to $0.81 in Q4 2023. Adjusted Earnings Per Share (Full Year 2024): $3.44, compared to $3.61 in 2023. Free Cash Flow (Full Year 2024): $393 million, a 44% increase year-over-year. Free Cash Flow Conversion (Full Year 2024): 76% of adjusted net income, up from 49% in 2023. Net Leverage (End of 2024): Reduced to under 3x for the first time in three years. Performance Sensing Revenue (2024): $2.74 billion, roughly flat year-over-year. Sensing Solutions Revenue (2024): $1.06 billion, an 8% decrease year-over-year. Performance Sensing Operating Margin (2024): 24.6%, an 80 basis point decrease year-over-year. Sensing Solutions Operating Margin (2024): 29.5%, a 30 basis point increase from 2023. Adjusted Operating Expenses (2024): $264 million, roughly flat year-over-year. Capital Returned to Shareholders (2024): $72 million through dividends and $69 million through share repurchases. Return on Invested Capital (2024): 10.2%, up from 9.7% in 2023. Q1 2025 Revenue Guidance: $870 million to $890 million. Q1 2025 Adjusted Operating Margin Guidance: 18.2% to 18.4%. Warning! GuruFocus has detected 5 Warning Signs with ST. Release Date: February 11, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Sensata Technologies Holding PLC (NYSE:ST) exceeded its revenue guidance for the fourth quarter of 2024, reporting $908 million compared to the expected range of $870 million to $900 million. The company improved its free cash flow conversion significantly, reaching 76% of adjusted net income, up from 49% in 2023. Net leverage was reduced to under 3x for the first time in three years, demonstrating strong financial management. Sensata's Performance Sensing segment showed resilience with revenue of $2.74 billion in 2024, outperforming the automotive and heavy vehicle end markets. The company successfully implemented restructuring activities to streamline processes, reduce overhead expenses, and consolidate facilities, enhancing operational efficiency. Overall revenue for 2024 decreased by approximately 3% to $3.93 billion, compared to $4.05 billion in 2023. The Sensing Solutions segment experienced an 8% year-over-year revenue decline, indicating challenges in the industrial and aerospace markets. Adjusted earnings per share for the fourth quarter of 2024 were $0.76, down from $0.81 in the same period of the previous year. The company anticipates flat organic revenue growth for 2025, reflecting ongoing market challenges and weak end markets. Foreign currency headwinds and normal seasonality are expected to impact revenue in the first quarter of 2025, with guidance set between $870 million to $890 million. Q: Can you discuss the outperformance in the automotive sector and what drove the 300 basis points? How should we think about this in the future? A: Brian Roberts, CFO: The first half of 2024 benefited from stronger ICE, especially in Europe. Our ICE portfolio is strong, and we expect normal outgrowth patterns to return in China by the second half of 2025. For the full year 2025, we anticipate modest growth, aligning with our historical range. Q: Regarding operating margin expansion from 18% in Q1 to over 19% in the second half of the year, how much is driven by operational improvements versus revenue leverage? A: Brian Roberts, CFO: We expect to be organically flat in 2025, with margins ranging from 19% to 19.3%. While volume is important, we have balanced our plan to generate operational productivity. We anticipate improvements in the second half of 2025 and into 2026. Q: Stephan, do you have any early thoughts on whether growth will be more organic or if M&A will play a role? A: Stephan von Schuckmann, CEO: Initially, the focus is on organic growth. I see opportunities in Asia Pacific, particularly China, by identifying future-winning OEMs. This approach, developed at my previous employer, will be implemented at Sensata to drive growth. Q: Can you elaborate on Sensata's exposure to tariffs, particularly with manufacturing in Mexico? A: Brian Roberts, CFO: Approximately 70% of our North American manufacturing is in Mexico. Tariffs would impact production costs rather than sales. We have a global footprint to minimize exposure and would work with customers to manage costs, which may ultimately be passed to consumers. Q: What are your impressions of the industrial and aerospace businesses, given their historically higher margins? A: Stephan von Schuckmann, CEO: Early impressions highlight opportunities in thermal management and electrical protection, such as heat pumps and leak detection. The A2L product is expected to drive growth. I'm exploring further opportunities, including data centers, for future growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
