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Why Is Vishay (VSH) Up 3.6% Since Last Earnings Report?
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It has been about a month since the last earnings report for Vishay Intertechnology (VSH - Free Report) . Shares have added about 3.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Vishay due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Vishay's Q3 Earnings & Revenues Up Y/Y
Vishay Intertechnology reported third-quarter 2021 adjusted earnings of 63 cents per share, which surged 152% year over year and 3.3% sequentially.
However, the figure missed the Zacks Consensus Estimate by 5.9%.
Revenues of $813.7 million increased 27.1% year over year but declined 0.7% from the previous quarter. Further, the figure lagged the Zacks Consensus Estimate of $834.1 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 1.26 at the end of the third quarter.
The company’s continued focus on expanding its manufacturing capacities is a key catalyst. Further, growth prospects related to factory automation, electric vehicles, and 5G infrastructure remain positives.
Product Segments in Detail
Resistors: The segment generated revenues of $181 million (22% of total revenues), up 24% 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 1.26 in the reported quarter.
Inductors: The product line generated revenues of $85 million (10% of total revenues), which increased 7% 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 1.11 at the end of the reported quarter.
MOSFET: The product line generated revenues of $176 million (22% of total revenues), improving 31% year over year. The book-to-bill ratio for the product line was 1.19 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 $116 million (14% of total revenues), up 25% year over year. The book-to-bill ratio for the product line was 1.7 in the reported quarter. Growing opportunities for capacitors in the areas of power transmission and electro cars remain tailwinds.
However, shortages of labor were concerning as manufacturing output and sales were hurt for capacitors.
Diodes: The segment generated revenues of $185 million (23% of total revenues), up 49% 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 1.31 in the quarter under review.
Optoelectronics: The product line generated revenues of $71 million (9% of the total revenues) in the reported quarter. The figure was up 9% from the year-ago quarter. The book-to-bill ratio for the product line was 1.36 for the period.
Operating Details
In third-quarter 2021, the gross margin was 27.7%, expanding 400 basis points (bps) on a year-over-year basis.
Selling, general and administrative expenses were $102.2 million, increasing 13.3% year over year. As a percentage of total revenues, the figure contracted 150 bps from the year-ago quarter to 12.6%.
Consequently, the operating margin expanded 560 bps on a year-over-year basis to 15.2%.
Balance Sheet & Cash Flows
As of Oct 2, 2021, cash and cash equivalents were $831.8 million, up from $726.8 million as of Jul 3, 2021. Short-term investments were $84.2 million, down from $129.03 million in the previous quarter. Inventories were $532.7 million, up from $507.9 million in the prior quarter.
Long-term debt was $454.8 million at the end of the third quarter compared with $454.03 million at the end of the second quarter.
In the third quarter, Vishay generated $135.7 million of cash from operations, up from $117.5 million in the previous quarter.
The company’s free cash flow in the reported quarter was $79.2 million, increasing from $85.3 million in the prior quarter.
Guidance
For fourth-quarter 2021, Vishay expects total revenues of $805-$845 million. The company anticipates a fourth-quarter gross margin of 27.7% (+/-50 bps).
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, Vishay has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Vishay has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Vishay (VSH) Up 3.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Vishay Intertechnology (VSH - Free Report) . Shares have added about 3.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Vishay due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Vishay's Q3 Earnings & Revenues Up Y/Y
Vishay Intertechnology reported third-quarter 2021 adjusted earnings of 63 cents per share, which surged 152% year over year and 3.3% sequentially.
However, the figure missed the Zacks Consensus Estimate by 5.9%.
Revenues of $813.7 million increased 27.1% year over year but declined 0.7% from the previous quarter. Further, the figure lagged the Zacks Consensus Estimate of $834.1 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 1.26 at the end of the third quarter.
The company’s continued focus on expanding its manufacturing capacities is a key catalyst. Further, growth prospects related to factory automation, electric vehicles, and 5G infrastructure remain positives.
Product Segments in Detail
Resistors: The segment generated revenues of $181 million (22% of total revenues), up 24% 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 1.26 in the reported quarter.
Inductors: The product line generated revenues of $85 million (10% of total revenues), which increased 7% 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 1.11 at the end of the reported quarter.
MOSFET: The product line generated revenues of $176 million (22% of total revenues), improving 31% year over year. The book-to-bill ratio for the product line was 1.19 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 $116 million (14% of total revenues), up 25% year over year. The book-to-bill ratio for the product line was 1.7 in the reported quarter. Growing opportunities for capacitors in the areas of power transmission and electro cars remain tailwinds.
However, shortages of labor were concerning as manufacturing output and sales were hurt for capacitors.
Diodes: The segment generated revenues of $185 million (23% of total revenues), up 49% 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 1.31 in the quarter under review.
Optoelectronics: The product line generated revenues of $71 million (9% of the total revenues) in the reported quarter. The figure was up 9% from the year-ago quarter. The book-to-bill ratio for the product line was 1.36 for the period.
Operating Details
In third-quarter 2021, the gross margin was 27.7%, expanding 400 basis points (bps) on a year-over-year basis.
Selling, general and administrative expenses were $102.2 million, increasing 13.3% year over year. As a percentage of total revenues, the figure contracted 150 bps from the year-ago quarter to 12.6%.
Consequently, the operating margin expanded 560 bps on a year-over-year basis to 15.2%.
Balance Sheet & Cash Flows
As of Oct 2, 2021, cash and cash equivalents were $831.8 million, up from $726.8 million as of Jul 3, 2021. Short-term investments were $84.2 million, down from $129.03 million in the previous quarter. Inventories were $532.7 million, up from $507.9 million in the prior quarter.
Long-term debt was $454.8 million at the end of the third quarter compared with $454.03 million at the end of the second quarter.
In the third quarter, Vishay generated $135.7 million of cash from operations, up from $117.5 million in the previous quarter.
The company’s free cash flow in the reported quarter was $79.2 million, increasing from $85.3 million in the prior quarter.
Guidance
For fourth-quarter 2021, Vishay expects total revenues of $805-$845 million. The company anticipates a fourth-quarter gross margin of 27.7% (+/-50 bps).
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, Vishay has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Vishay has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.