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Why Is Vishay (VSH) Up 2.2% 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 2.2% 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 catalysts.

Vishay's Q1 Earnings & Revenues Up Y/Y

Vishay Intertechnology reported first-quarter 2022 adjusted earnings of 71 cents per share, beating the Zacks Consensus Estimate by 22.4%. It surged 54% year over year and 15% sequentially.

Revenues of $853.8 million increased 11.7% year over year and 1.3% from the previous quarter. Further, the figure surpassed the Zacks Consensus Estimate by 1.2%.

The strong performance of resistors, diodes, MOSFETs, capacitors and opto product lines drove year-over-year revenues growth in the reported quarter.

Vishay’s book-to-bill ratio was 1.14 at the end of the first quarter.

Product Segments in Detail

Resistors: The segment generated revenues of $207 million (24% of total revenues), up 10.9% year over year. The book-to-bill ratio for the product line was 1.24 in the reported quarter.

Inductors: The product line generated revenues of $82.8 million (10% of total revenues), which decreased 0.8% on a year-over-year basis. The book-to-bill ratio for the product line was 1.14 at the end of the reported quarter.

MOSFETs: The product line generated revenues of $172.7 million (20% of total revenues), improving 12.7% year over year. The book-to-bill ratio for the product line was 1.28 at the end of the reported quarter.

Capacitors: The product line generated revenues of $128 million (15% of total revenues), up 20.3% year over year. The book-to-bill ratio for the product line was 1.02 in the reported quarter.

Diodes: The segment generated revenues of $182.3 million (21% of total revenues), up 16% from the year-ago quarter. The book-to-bill ratio for the product line was 1.16 in the quarter under review.

Optoelectronics: The product line generated revenues of $81 million (10% of the total revenues) in the reported quarter. The figure was up 4.2% from the year-ago quarter. The book-to-bill ratio for the product line was 0.78 for the period.

End-Market Details

Industrial: The industrial market generated $337.4 million (40% of total revenues) in the reported quarter, up 25% year over year.

Automotive: The automotive market generated $259.5 million (30% of total revenues) with a marginal increment of 1% from the prior year period.

Telecommunications: The telecommunications market generated $31 million (4% of total revenues), increasing 25% from the same quarter last year.

Computing: The computing market generated $67.9 million (8% of total revenues), up 13% year over year.

Consumer Products: The consumer products market generated $38.7 million (4% of total revenues), decreasing 5% from the year-ago period.

Power Supplies: The power supplies market generated $40.3 million (5% of total revenues), up 14% year over year.

Military & Aerospace: The military & aerospace market generated $46.5 million (5% of total revenues) and rose 12% from the same quarter last year.

Medical: The medical market generated $32.5 million (4% of total revenues), declining 8% on a year over year basis.

Region Details

Vishay generated $344 million revenues from Asia (40% of total revenues), which increased 6.7% year over year. Revenue generated from Europe increased 8.1% from the year ago quarter to $289.98 million (34% of total revenues). The company generated $219.8 million (26% of total revenues) from Americas, up 26.4% year over year.

Operating Results

In first-quarter 2021, the gross margin was 30.3%, expanding 380 basis points (bps) on a year-over-year basis.

Selling, general and administrative expenses were $112.9 million, increasing 6.8% year over year. As a percentage of total revenues, the figure contracted 60 bps from the year-ago quarter to 13.2%.

Consequently, the operating margin expanded 440 bps on a year-over-year basis to 17.1%.

Balance Sheet & Cash Flows

As of Mar 31, 2022, cash and cash equivalents were $789.2 million, up from $774.1 million as of Dec 31, 2021. Short-term investments were $96.6 million, down from $146.7 million in the previous quarter. Inventories were $602.9 million, up from $536.5 million in the prior quarter.

Long-term debt was $456.5 million at the end of the first quarter compared with $455.7 million at the end of the fourth quarter 2021.

In the reported quarter, Vishay generated $33.6 million of cash from operations, down from $146.7 million in the previous quarter.

The company’s free cash flow in the first quarter was $(2.3) million, compared with $46.5 million in the prior quarter.

Vishay returned $24.4 million to stockholders, out of which $14.5 million was paid as dividends and $9.9 million was stock repurchased.

Guidance

For second-quarter 2022, Vishay expects total revenues of $830-$870 million.

The company anticipates a second-quarter gross margin of 28.1% (+/-50 bps).

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -5.8% due to these changes.

VGM Scores

Currently, Vishay has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, 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 broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Vishay has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.


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