Vishay Intertechnology, Inc. (VSH - Free Report) reported fourth-quarter 2020 adjusted earnings of 28 cents per share, which met the Zacks Consensus Estimate. Further, the bottom line improved 12% sequentially and 115.4% year over year.
Revenues of $667.2 million surpassed the Zacks Consensus Estimate of $646.8 million. Further, the top line was up 9.4% from the year-ago quarter and 4.2% from the prior quarter.
Top-line growth was driven by strong performances of resistor, diode, MOSFET and opto product lines in the reported quarter. Further, a recovery in the automotive sector and a strong momentum across Asia markets, especially China, were tailwinds.
However, the coronavirus-induced disruptions acted as major overhangs.
Notably, Vishay’s book-to-bill ratio was 1.44 at the end of the fourth quarter.
The company’s continued focus on expanding its manufacturing capacities is a key catalyst. Moreover, growth opportunities across all the product segments remain a positive.
Product Segments in Detail
Resistors: The segment generated revenues of $161 million (24% of total revenues), up5% year over year. The strong momentum of resistors acrossautomotive, industrial, military and medical markets was a positive. Notably, the book-to-bill ratio for this product linewas 1.24 in the reported quarter.
Inductors: The product line generated revenues of $75 million (11% of total revenues), which decreased 3% on a year-over-year basis. The coronavirus-led softness in the automotive sector remained a headwind. Further, high transportation costs and foreign currency fluctuations were concerning. The book-to-bill ratio for this product was 1.03 at the end of the reported quarter.
Nevertheless, the company’s well-performing magnetics continued to drive its specialty business.
MOSFET: The product line generated revenues of $132 million (20% of total revenues), improving 12% year over year. The book-to-bill ratio for this product was 1.64 at the end of the reported quarter. Growing momentum across the automotive space and solid demand environment contributed well.
Capacitors: The product line generated revenues of $92 million (14% of total revenues), down 6% year over year. The book-to-bill ratio for this product was 1.54 in the reported quarter. Delays in governmental projects were overhangs.
However, the product line witnessed a solid momentum across America and Europe. Further, growing opportunities for capacitors in the areas of power transmission and electro cars remain tailwinds.
Diodes: The segment generated revenues of $139 million (21% of total revenues), up 11% from the year-ago quarter. This can primarily be attributed to the strong recovery in this particular product line. Further, Vishay’s strong momentum across the automotive and industrial markets with diodes remained a positive. Notably, the book-to-bill ratio for this product was 1.65inthe quarter under review.
Optoelectronics: The product line generated revenues of $68 million (10% of total revenues) during the reported quarter. The figure was up 29% from the year-ago quarter. The book-to-bill ratio for this product was 1.46 inthe period. Strengthening demand environment for the product line contributed well.
Operating Details
In fourth-quarter 2020, gross margin was 22.8%, expanding 60 basis points (bps) on a year-over-year basis.
Selling, general and administrative expenses were $92.3 million, declining 2.1% year over year. As a percentage of total revenues, the figure contracted 170 bps from the year-ago quarter to 13.8%.
Consequently, operating margin expanded 500 bps on a year-over-year basis to 9%.
Balance Sheet & Cash Flows
As of Dec 31, 2020, cash and cash equivalents were $619.9 million, down from $682.4 millionas of Oct 3, 2020. Short-term investments were $158.5 million, up from $29.5 million in the previous quarter. Inventories were $448.3 million, up from $440.2 million in the prior quarter.
Long-term debt was $394.9 million at the end of the fourth quarter compared with $392.3 million at the end of the third quarter.
In the fourth quarter, the company generated $125.7 million of cash from operations, up from $64.3 million in the previous quarter.
The company’s free cash flow in the reported quarter was $73.01 million, declining from $42.4 million in the prior quarter.
Guidance
For first-quarter 2021, Vishay expects total revenues of $705-$745 million. The Zacks Consensus Estimate for the same is pegged at $675.6 million.
Further, the company anticipates first-quarter gross margin to be 25% with +/-60 bps.
Zacks Rank & Stocks to Consider
Vishay Intertechnology currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are CDW Corporation (CDW - Free Report) , CrowdStrike (CRWD - Free Report) and Garmin (GRMN - Free Report) . All companies carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rates for CDW, CrowdStrike and Garmin are currently pegged at 13.1%, 25% and 6.8%, respectively.
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Vishay Intertechnology, Inc. (VSH - Free Report) reported fourth-quarter 2020 adjusted earnings of 28 cents per share, which met the Zacks Consensus Estimate. Further, the bottom line improved 12% sequentially and 115.4% year over year.
Revenues of $667.2 million surpassed the Zacks Consensus Estimate of $646.8 million. Further, the top line was up 9.4% from the year-ago quarter and 4.2% from the prior quarter.
Top-line growth was driven by strong performances of resistor, diode, MOSFET and opto product lines in the reported quarter. Further, a recovery in the automotive sector and a strong momentum across Asia markets, especially China, were tailwinds.
However, the coronavirus-induced disruptions acted as major overhangs.
Notably, Vishay’s book-to-bill ratio was 1.44 at the end of the fourth quarter.
The company’s continued focus on expanding its manufacturing capacities is a key catalyst. Moreover, growth opportunities across all the product segments remain a positive.
Product Segments in Detail
Resistors: The segment generated revenues of $161 million (24% of total revenues), up5% year over year. The strong momentum of resistors acrossautomotive, industrial, military and medical markets was a positive. Notably, the book-to-bill ratio for this product linewas 1.24 in the reported quarter.
Inductors: The product line generated revenues of $75 million (11% of total revenues), which decreased 3% on a year-over-year basis. The coronavirus-led softness in the automotive sector remained a headwind. Further, high transportation costs and foreign currency fluctuations were concerning. The book-to-bill ratio for this product was 1.03 at the end of the reported quarter.
Nevertheless, the company’s well-performing magnetics continued to drive its specialty business.
MOSFET: The product line generated revenues of $132 million (20% of total revenues), improving 12% year over year. The book-to-bill ratio for this product was 1.64 at the end of the reported quarter. Growing momentum across the automotive space and solid demand environment contributed well.
Capacitors: The product line generated revenues of $92 million (14% of total revenues), down 6% year over year. The book-to-bill ratio for this product was 1.54 in the reported quarter. Delays in governmental projects were overhangs.
However, the product line witnessed a solid momentum across America and Europe. Further, growing opportunities for capacitors in the areas of power transmission and electro cars remain tailwinds.
Diodes: The segment generated revenues of $139 million (21% of total revenues), up 11% from the year-ago quarter. This can primarily be attributed to the strong recovery in this particular product line. Further, Vishay’s strong momentum across the automotive and industrial markets with diodes remained a positive. Notably, the book-to-bill ratio for this product was 1.65inthe quarter under review.
Optoelectronics: The product line generated revenues of $68 million (10% of total revenues) during the reported quarter. The figure was up 29% from the year-ago quarter. The book-to-bill ratio for this product was 1.46 inthe period. Strengthening demand environment for the product line contributed well.
Operating Details
In fourth-quarter 2020, gross margin was 22.8%, expanding 60 basis points (bps) on a year-over-year basis.
Selling, general and administrative expenses were $92.3 million, declining 2.1% year over year. As a percentage of total revenues, the figure contracted 170 bps from the year-ago quarter to 13.8%.
Consequently, operating margin expanded 500 bps on a year-over-year basis to 9%.
Balance Sheet & Cash Flows
As of Dec 31, 2020, cash and cash equivalents were $619.9 million, down from $682.4 millionas of Oct 3, 2020. Short-term investments were $158.5 million, up from $29.5 million in the previous quarter. Inventories were $448.3 million, up from $440.2 million in the prior quarter.
Long-term debt was $394.9 million at the end of the fourth quarter compared with $392.3 million at the end of the third quarter.
In the fourth quarter, the company generated $125.7 million of cash from operations, up from $64.3 million in the previous quarter.
The company’s free cash flow in the reported quarter was $73.01 million, declining from $42.4 million in the prior quarter.
Guidance
For first-quarter 2021, Vishay expects total revenues of $705-$745 million. The Zacks Consensus Estimate for the same is pegged at $675.6 million.
Further, the company anticipates first-quarter gross margin to be 25% with +/-60 bps.
Zacks Rank & Stocks to Consider
Vishay Intertechnology currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are CDW Corporation (CDW - Free Report) , CrowdStrike (CRWD - Free Report) and Garmin (GRMN - Free Report) . All companies carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rates for CDW, CrowdStrike and Garmin are currently pegged at 13.1%, 25% and 6.8%, respectively.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.9% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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