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Vishay (VSH) Q2 Earnings Beat Estimates, Revenues Fall Y/Y
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Vishay Intertechnology, Inc. (VSH - Free Report) reported second-quarter 2020 adjusted earnings of 18 cents per share, which beat the Zacks Consensus Estimate by 157.1%.
However, the bottom line declined 50% year over year and 14.3% sequentially.
Revenues of $581.7 million surpassed the Zacks Consensus Estimate of $558 million. However, the top line was down 15.1% from the year-ago quarter and 5.1% from the prior quarter.
Coronavirus-induced disruptions remained a major overhang. Lockdowns in many countries were headwinds. Further, automotive plant shutdowns across American and European regions impacted the company’s second-quarter results significantly. Moreover, sluggish commercial avionics space in Americas was a concern.
Nevertheless, the company witnessed recovery in the Asian markets during the reported quarter. Growth in the automotive, medical and automotive markets in China were tailwinds.
Notably, Vishay’s book-to-bill ratio was 0.82 at the end of the secondquarter.
Coming to price performance, Vishay has lost 20.1% in the past year against the industry’s rise of 26.9%.
Coronvirus pandemic-induced uncertainty and economic volatility globally are major concerns in the near term.
Nevertheless, the company’s continued focus toward expanding manufacturing capacities is a key catalyst. Moreover, growth opportunities across all the product segments remains a positive.
All these factors are likely to instill investor optimism in the stock.
Product Segments in Detail
Resistors: This product segment generated revenues of $135 million (23.2% of total revenues), down 17% year over year. This was primarily due to softness in the automotive market. Notably, the book-to-bill ratio for this product linewas 0.73 in the reported quarter.
Nevertheless, strong momentum of resistors across industrial, millitary and medical markets was a positive.
Inductors: This product line generated revenues of $65 million (11.2% of total revenues), which decreased 15% on a year-over year basis. The book-to-bill ratio for this product was 0.96 at the end of the reported quarter. Sluggish automotive market impacted the top-line growth within this particular product segment.
Nevertheless, the company’s well-performing magnetics continued to drive its specialty business.
MOSFET: This product line generated revenues of $119 million (20.5% of total revenues), declining 7% year over year. The book-to-bill ratio for this product was 0.97 at the end of the reported quarter.
Capacitors: This product line generated revenues of $84 million (14.5% of total revenues), down 24% year over year. The book-to-bill ratio for this product was 0.90 in the reported quarter. Disruption in the general market conditions owing to coronavirus pandemic remained a woe.
However, this product line witnessed solid momentum across America and Europe. Further, growing opportunities for capacitors in the areas of power transmission and electro cars remain tailwinds. Additionally, growing momentum of this particular product line across military market and grid expansion opportunities in China were positives.
Diodes: The segment generated revenues of $124 million (22% of total revenues), down12% from the year-ago quarter. This can primarily be attributed to high level of inventory in the supply chain. Further, sluggish market conditions were headwinds. Notably, the book-to-bill ratio for this product was 0.61 during the quarter under review.
Optoelectronics: This product line generated revenues of $49 million (8.6% of total revenues) during the reported quarter. The figure was down 19% from the year-ago quarter. The book-to-bill ratio for this product was 0.96 during the reported quarter. Factory shutdowns remained a concern as it resulted in rise in manufacturing inefficiencies.
Vishay Intertechnology, Inc. Price, Consensus and EPS Surprise
In second-quarter 2020, gross margin was 22.5%, contracting 300 basis points (bps) on a year-over-year basis. Extra expenses that it incurred due to COVID-19 led disruptions were overhangs.
Selling, general and administrative expenses were $89.1 million, declining 6.3% year over year. However, as a percentage of total revenues, the figure expanded 140 bps from the year-ago quarter.
Consequently, operating margin contracted 460 bps on a year-over-year basis to 7%.
Balance Sheet & Cash Flows
As of Jul 4, 2020, cash and cash equivalents were $599.9 million, decreasing from $680.7 millionas of Apr 4, 2020. Short-term investments were $157.2 million, up from $140.7 million in the previous quarter. Inventories were $449.2 million, down from $453.2 million in the prior quarter.
Long-term debt was $438.5 million at the end of the second quarter compared with $552.1 million at the end of the first quarter.
In the second quarter, the company generated $90.4 million of cash from operations, up from $34.5 million in the previous quarter.
The company’s free cash flow in the reported quarter was $66.1 million, declining from $10.2 million in the prior quarter.
Guidance
For third-quarter 2020, Vishay expects total revenues in the range of $580-$620 million. The Zacks Consensus Estimate for the same is pegged at $573.25 million.
Further, the company anticipates the third-quarter gross margin of 22.8% with +/-70 bps.
Dropbox, Asure Software, and Analog Devices are scheduled to report earnings on Aug 6, Aug 10 and Aug 19, respectively.
Long-term earnings growth rate of Dropbox, Asure Software, and Analog Devices is pegged at 16.83%, 14% and 13.33%, respectively.
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Vishay (VSH) Q2 Earnings Beat Estimates, Revenues Fall Y/Y
Vishay Intertechnology, Inc. (VSH - Free Report) reported second-quarter 2020 adjusted earnings of 18 cents per share, which beat the Zacks Consensus Estimate by 157.1%.
However, the bottom line declined 50% year over year and 14.3% sequentially.
Revenues of $581.7 million surpassed the Zacks Consensus Estimate of $558 million. However, the top line was down 15.1% from the year-ago quarter and 5.1% from the prior quarter.
Coronavirus-induced disruptions remained a major overhang. Lockdowns in many countries were headwinds. Further, automotive plant shutdowns across American and European regions impacted the company’s second-quarter results significantly. Moreover, sluggish commercial avionics space in Americas was a concern.
Nevertheless, the company witnessed recovery in the Asian markets during the reported quarter. Growth in the automotive, medical and automotive markets in China were tailwinds.
Notably, Vishay’s book-to-bill ratio was 0.82 at the end of the secondquarter.
Coming to price performance, Vishay has lost 20.1% in the past year against the industry’s rise of 26.9%.
Coronvirus pandemic-induced uncertainty and economic volatility globally are major concerns in the near term.
Nevertheless, the company’s continued focus toward expanding manufacturing capacities is a key catalyst. Moreover, growth opportunities across all the product segments remains a positive.
All these factors are likely to instill investor optimism in the stock.
Product Segments in Detail
Resistors: This product segment generated revenues of $135 million (23.2% of total revenues), down 17% year over year. This was primarily due to softness in the automotive market. Notably, the book-to-bill ratio for this product linewas 0.73 in the reported quarter.
Nevertheless, strong momentum of resistors across industrial, millitary and medical markets was a positive.
Inductors: This product line generated revenues of $65 million (11.2% of total revenues), which decreased 15% on a year-over year basis. The book-to-bill ratio for this product was 0.96 at the end of the reported quarter. Sluggish automotive market impacted the top-line growth within this particular product segment.
Nevertheless, the company’s well-performing magnetics continued to drive its specialty business.
MOSFET: This product line generated revenues of $119 million (20.5% of total revenues), declining 7% year over year. The book-to-bill ratio for this product was 0.97 at the end of the reported quarter.
Capacitors: This product line generated revenues of $84 million (14.5% of total revenues), down 24% year over year. The book-to-bill ratio for this product was 0.90 in the reported quarter. Disruption in the general market conditions owing to coronavirus pandemic remained a woe.
However, this product line witnessed solid momentum across America and Europe. Further, growing opportunities for capacitors in the areas of power transmission and electro cars remain tailwinds. Additionally, growing momentum of this particular product line across military market and grid expansion opportunities in China were positives.
Diodes: The segment generated revenues of $124 million (22% of total revenues), down12% from the year-ago quarter. This can primarily be attributed to high level of inventory in the supply chain. Further, sluggish market conditions were headwinds. Notably, the book-to-bill ratio for this product was 0.61 during the quarter under review.
Optoelectronics: This product line generated revenues of $49 million (8.6% of total revenues) during the reported quarter. The figure was down 19% from the year-ago quarter. The book-to-bill ratio for this product was 0.96 during the reported quarter. Factory shutdowns remained a concern as it resulted in rise in manufacturing inefficiencies.
Vishay Intertechnology, Inc. Price, Consensus and EPS Surprise
Vishay Intertechnology, Inc. price-consensus-eps-surprise-chart | Vishay Intertechnology, Inc. Quote
Operating Details
In second-quarter 2020, gross margin was 22.5%, contracting 300 basis points (bps) on a year-over-year basis. Extra expenses that it incurred due to COVID-19 led disruptions were overhangs.
Selling, general and administrative expenses were $89.1 million, declining 6.3% year over year. However, as a percentage of total revenues, the figure expanded 140 bps from the year-ago quarter.
Consequently, operating margin contracted 460 bps on a year-over-year basis to 7%.
Balance Sheet & Cash Flows
As of Jul 4, 2020, cash and cash equivalents were $599.9 million, decreasing from $680.7 millionas of Apr 4, 2020. Short-term investments were $157.2 million, up from $140.7 million in the previous quarter. Inventories were $449.2 million, down from $453.2 million in the prior quarter.
Long-term debt was $438.5 million at the end of the second quarter compared with $552.1 million at the end of the first quarter.
In the second quarter, the company generated $90.4 million of cash from operations, up from $34.5 million in the previous quarter.
The company’s free cash flow in the reported quarter was $66.1 million, declining from $10.2 million in the prior quarter.
Guidance
For third-quarter 2020, Vishay expects total revenues in the range of $580-$620 million. The Zacks Consensus Estimate for the same is pegged at $573.25 million.
Further, the company anticipates the third-quarter gross margin of 22.8% with +/-70 bps.
Zacks Rank & Key Picks
Vishay currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Dropbox (DBX - Free Report) , Asure Software, Inc. (ASUR - Free Report) and Analog Devices (ADI - Free Report) . While both Dropbox and Asure Software sport a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Dropbox, Asure Software, and Analog Devices are scheduled to report earnings on Aug 6, Aug 10 and Aug 19, respectively.
Long-term earnings growth rate of Dropbox, Asure Software, and Analog Devices is pegged at 16.83%, 14% and 13.33%, respectively.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>