Sensata Technologies (NYSE: ST) reported Q4 EPS of $0.85, $0.15 better than the analyst estimate of $0.70. Revenue for the quarter came in at $906.5 million versus the consensus estimate of $838.16 million.

Revenue:

• Revenue was $906.5 million, an increase of $59.8 million, or 7.1%, compared to $846.7 million in the fourth quarter of 2019.
• Revenue increased 5.3% from the fourth quarter of 2019 on an organic basis, which excludes a 1.8% increase from foreign currency exchange rates versus the prior year period.
• Revenue increased 15.0% from the third quarter of 2020 on a reported basis.

Operating income:

• Operating income was $154.2 million (17.0% of revenue), an increase of $33.4 million, or 27.7%, compared to operating income of $120.7 million (14.3% of revenue) in the fourth quarter of 2019 and an increase of 21.5% compared to operating income of $126.8 million (16.1% of revenue) in the third quarter of 2020.
• Adjusted operating income was $195.6 million (21.6% of revenue), an increase of $3.1 million, or 1.6%, compared to adjusted operating income of $192.5 million (22.7% of revenue) in the fourth quarter of 2019. Adjusted operating income increased $40.8 million, or 26.4%, sequentially from $154.8 million (19.6% of revenue) in the third quarter of 2020.

Earnings per share:

• Earnings per share was $0.77, an increase of 126.5% compared to earnings per share of $0.34 in the fourth quarter of 2019 and an increase of $0.28, or 57.1%, compared to earnings per share of $0.49 in the third quarter of 2020.
• Adjusted earnings per share was $0.85, a decrease of (4.5%) compared to adjusted earnings per share of $0.89 in the fourth quarter of 2019 but an increase of 28.8% compared to adjusted earnings per share of $0.66 in the third quarter of 2020.
• Changes in foreign currency exchange rates increased Sensata's adjusted earnings per share by $0.05 in the fourth quarter of 2020 compared to the prior year period.

"The fourth quarter results reflect a meaningful return to growth across our automotive, heavy vehicle and industrial markets. Beyond improvements in end markets, Sensata's growth outpaced the automotive market by 970 basis points and the heavy vehicle market by 990 basis points during the quarter,” said Jeff Cote, CEO and President of Sensata. "While 2020 posed challenges across the world, we are pleased with how quickly and effectively we adapted to evolving conditions, clearly positioning Sensata to benefit from the recovery. We are continuing to execute on our long-term growth strategy as evidenced by the recent acquisition of Lithium Balance in Electrification, adding a key core competence in Battery Management Systems to Sensata's extensive capabilities."

GUIDANCE:

Sensata Technologies sees Q1 2021 EPS of $0.67-$0.77, versus the consensus of $0.74. Sensata Technologies sees Q1 2021 revenue of $875-915 million, versus the consensus of $871.71 million.

Sensata Technologies sees FY2021 EPS of $3.06-$3.42, versus the consensus of $3.26. Sensata Technologies sees FY2021 revenue of $3.425-3.515 billion, versus the consensus of $3.51 billion.

"Sensata delivered strong financial performance in the fourth quarter, posting 15.0% revenue growth and 26.4% adjusted operating income growth from the third quarter," said Paul Vasington, EVP and CFO of Sensata. "Sensata generated record free cash flow of $240 million in the fourth quarter, driven by strong earnings recovery, working capital management, and Capital Expenditure controls. For the first quarter of 2021, we expect revenue of $875 to $915 million and adjusted EPS of $0.67 to $0.77."

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