Sensata Technologies Holding N.V. (NYSE: ST) saw its stock plunge over 8% in pre-market trading on November 5, 2024, after the sensor manufacturer reported disappointing third-quarter results and provided weak guidance for the fourth quarter, reflecting the impact of a challenging demand environment.
For the third quarter of 2024, Sensata's revenue declined 1.8% year-over-year to $982.8 million, missing Wall Street's expectations of $984.5 million. While adjusted earnings per share of $0.86 were in line with analyst estimates, they were down from $0.91 a year ago. The company's performance was impacted by weaker automotive and heavy vehicle production due to macroeconomic headwinds.
During the quarter, Sensata recorded several significant charges, including a non-cash goodwill impairment charge of $150 million related to its Dynapower business due to project delays, a loss of approximately $110 million from the sale of its Insights business as part of efforts to streamline operations, and charges of approximately $58 million associated with restructuring actions to improve operational efficiency and product lifecycle management.
Looking ahead, Sensata provided a disappointing outlook for the fourth quarter, reflecting ongoing headwinds in the automotive and heavy vehicle markets, as well as the impact of product line exits and the sale of its Insights business. The company expects revenue of $870 million to $900 million, well below the consensus estimate of $962.9 million. Adjusted earnings per share guidance of $0.71 to $0.76 also missed analyst expectations of $0.86.
Despite the near-term challenges, Sensata is taking steps to improve operational efficiency and execution. The company has initiated several initiatives focused on streamlining processes, increasing automation, reducing overhead expenses, and aligning capital expenditures to address the lower market reality. These efforts are aimed at enhancing efficiency and reducing costs to offset the weak demand environment.
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