Sensata Posts $114.2 Million Profit, But A $24 Million EV Cancellation Payment Flattered The Quarter
Adjusted earnings rose 27% to $1.13 a share, and fourth-quarter revenue is guided below the third quarter's level.
Sensata Technologies, which makes sensors and electrical protection components, earned $114.2 million in the third quarter, against a loss a year earlier, with a $24.0 million payment from a customer that canceled an electric vehicle program padding the result. The company, reporting Tuesday in an 8-K, guided fourth-quarter revenue to $942 million to $972 million, below the $1,003.6 million it booked in the third.
The payment behind the beat
Revenue rose 7.7% from $932.0 million a year earlier. Without the termination payment it would have been $979.6 million.
Adjusted earnings were $1.13 a share, up 27.0% from $0.89, but would have been $0.97 without the payment. Adjusted operating income was $215.3 million, a 21.5% margin; excluding the payment it would have been $191.3 million, or 19.5% of revenue.
On a standard accounting basis, earnings were $0.78 a share against a loss of $1.12 a year earlier, when a $225.7 million goodwill impairment charge hit results.
CEO Stephan von Schuckmann said, "Our core business is stronger, and we have growing conviction in our ability to accelerate long-term organic growth."
Autos drive the margin
Sensata sells sensors, which turn readings such as pressure or temperature into electronic signals, plus switches, fuses and high-voltage contactors. As of its 2025 annual report, Automotive was about 57.0% of revenue, with Industrials at about 21.3% and Aerospace, Defense, and Commercial Equipment at about 21.7%.
Automotive revenue was $555.8 million in the quarter, and its operating margin was 28.4%, up from 23.7% a year earlier. Industrials earned a 28.8% margin and Aerospace, Defense, and Commercial Equipment 26.7%, down from 27.4%.
Debt down, outlook cooler
Free cash flow was $198.3 million. Net debt was $1,873.7 million at September 30, and the net leverage ratio was 2.1, versus 2.7 at the end of 2025. In the first nine months, Sensata completed a $400 million cash tender offer retiring about $406 million of debt, and it bought back another $32.6 million of debt on the open market in the third quarter.
Fourth-quarter guidance includes recovery of tariff costs, and adjusted earnings per share of $0.95 to $0.99. The company's table puts the revenue range 3% to 6% above the $918 million of the fourth quarter of 2025. Tariff assumptions reflect trade policies in effect as of October 26 and exclude any prospective tariff refunds.
Sensata discussed the quarter and outlook on a call at 5:00 p.m. Eastern on Tuesday.
