Sensata Technologies Holding plc (NYSE:ST) Q4 2022 Earnings Call Transcript

Jeff Cote: Yes. So I think two parts of the question around the supply chain, which I’ll elaborate a little bit more. Paul will provide a perspective as to what we’re seeing in terms of the impact on supply chain. And the second part, I think was around what we’re seeing in China. So on the supply chain question, I would echo what Paul said, right? We’re seeing some of that abate, but it’s not gone away. We still do see inflation across some of our raw material categories. We still do see pockets of challenge associated with shortage of parts, but it’s clearly abating from where it was at its peak. But it’s still upside down from what is a normal business model where we would be able to operate in a normal environment, and we’ll keep working away at that.

Obviously, we’re getting a lot better at managing through that. The team has done an outstanding job, but we’re not completely out of the woods in terms of the supply chain challenges that we’ve been experiencing. On the China question, candidly, I think the rebound in China in the fourth quarter was a bit of a disappointment. I would have expected there to be more of a recovery in China in the fourth quarter because I just inherently believe that the Chinese government would put incentives in place to stimulate the economy. Clearly, the move away from a zero COVID policy is at least getting things moving again, unfortunately, having negative impact in terms of infections and death in the country. But the expectation would be that going into first quarter; it’s going to continue to be a little bit choppy in terms of the overall market environment in China.

But hopefully, as we progress throughout the year, we’ll see some improvement there as things get back to a more normal steady state. It’s an important market for us. But again, we serve a global market, and things balance out in terms of puts and takes across markets and geographic markets and end markets that we serve.

Jacob Sayer: Thanks, Travis for the question.

Operator: There are no more questions in the queue. This concludes our question-and-answer session. I would like to turn the conference back over to Jacob Sayer for any closing remarks.

Jacob Sayer: Thank you, Jason. I’d like to thank everyone for joining us this morning. Sensata will be participating in the Morgan Stanley Technology Investor Conference in San Francisco in early March. We look forward to seeing you at that event or on our first quarter earnings call at the end of April. Thank you for joining us this morning and for your interest in Sensata. Jason, you can now end the call.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.