Vishay (VSH) Q4 Earnings In Line, Revenues Beat Estimates

INTU VSH BRKR ZS

Vishay Intertechnology, Inc. (VSH - Free Report) reported fourth-quarter 2021 adjusted earnings of 62 cents per share, which was in line with the Zacks Consensus Estimate and surged 121.4% year over year. However, the figure fell 1.6% sequentially.

Revenues of $843.1 million increased 26.4% year over year and 3.6% from the previous quarter. Further, the figure surpassed the Zacks Consensus Estimate of $825 million.

The strong performance of resistor, inductor, diode, MOSFET, capacitor and opto product lines drove year-over-year revenues growth in the reported quarter.

Vishay’s book-to-bill ratio was 1.09 at the end of the fourth quarter.

Product Segments in Detail

Resistors: The segment generated revenues of $190 million (23% of total revenues), up 20% year over year. The strong momentum of resistors across automotive, industrial, military and medical markets was a positive. The book-to-bill ratio for the product line was 1.14 in the reported quarter.

Inductors: The product line generated revenues of $82 million (10% of total revenues), which increased 9% on a year-over-year basis. This was primarily attributed to the company’s well-performing magnetics, which continued to drive its specialty business. The book-to-bill ratio for the product line was 1.13 at the end of the reported quarter.

MOSFET: The product line generated revenues of $171 million (20% of total revenues), improving 32% year over year. The book-to-bill ratio for the product line was 1.01 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 $129 million (15% of total revenues), up 45% year over year. The book-to-bill ratio for the product line was 1.4 in the reported quarter. Growing opportunities for capacitors in the areas of power transmission and electro cars remain tailwinds.

Diodes: The segment generated revenues of $192 million (23% of total revenues), up 40% from the year-ago quarter. Vishay’s strong momentum across the automotive and industrial markets with diodes remained a positive. The book-to-bill ratio for the product line was 1.10 in the quarter under review.

Optoelectronics: The product line generated revenues of $78 million (9% of the total revenues) in the reported quarter. The figure was up 17% from the year-ago quarter, owing to strong demand environment. The book-to-bill ratio for the product line was 1.21 for the period.

Operating Details

In fourth-quarter 2021, the gross margin was 27.3%, expanding 450 basis points (bps) on a year-over-year basis.

Selling, general and administrative expenses were $108.3 million, increasing 17.4% year over year. As a percentage of total revenues, the figure contracted 100 bps from the year-ago quarter to 12.8%.

Consequently, the operating margin expanded 540 bps on a year-over-year basis to 14.4%.

Balance Sheet & Cash Flows

As of Dec 31, 2021, cash and cash equivalents were $774.1 million, down from $831.8 million as of Oct 2, 2021. Short-term investments were $146.7 million, up from $84.2 million in the previous quarter. Inventories were $536.5 million, up from $532.7 million in the prior quarter.

Long-term debt was $455.7 million at the end of the fourth quarter compared with $454.8 million at the end of the third quarter.

In the fourth quarter, Vishay generated $146.7 million of cash from operations, up from $135.7 million in the previous quarter.

The company’s free cash flow in the reported quarter was $46.5 million, down from $79.2 million in the prior quarter.

Guidance

For first-quarter 2022, Vishay expects total revenues of $820-$860 million. The Zacks Consensus Estimate for the same is pegged at $848.7 million.

The company anticipates a first-quarter gross margin of 27.3% (+/-50 bps).

Zacks Rank & Stocks to Consider 

Vishay currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Bruker (BRKR - Free Report) , Intuit (INTU - Free Report) and Zscaler (ZS - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bruker is scheduled to release fourth-quarter 2021 results on Feb 11. The company has gained 15.7% over a year. The long-term earnings growth rate for BRKR is currently projected at 20.6%.

Intuit is slated to report second-quarter fiscal 2022 results on Feb 24. The company has gained 37.3% over a year. The long-term earnings growth rate for INTU is currently projected at 15.7%.

Zscaler is slated to report second-quarter fiscal 2022 results on Feb 24. The company has gained 17.8% over a year. The long-term earnings growth rate for ZS is currently projected at 37.1%.

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