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Vishay (VSH) Down 8.7% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Vishay Intertechnology (VSH - Free Report) . Shares have lost about 8.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Vishay due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Vishay's Q4 Earnings & Revenues Up Y/Y
Vishay Intertechnology 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 company anticipates a first-quarter gross margin of 27.3% (+/-50 bps).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -12.12% due to these changes.
VGM Scores
Currently, Vishay has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile 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 broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. 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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Vishay (VSH) Down 8.7% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Vishay Intertechnology (VSH - Free Report) . Shares have lost about 8.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Vishay due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Vishay's Q4 Earnings & Revenues Up Y/Y
Vishay Intertechnology 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 company anticipates a first-quarter gross margin of 27.3% (+/-50 bps).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -12.12% due to these changes.
VGM Scores
Currently, Vishay has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile 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 broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Vishay has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.