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Why Is Vishay (VSH) Down 5.9% Since Last Earnings Report?
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A month has gone by since the last earnings report for Vishay Intertechnology (VSH - Free Report) . Shares have lost about 5.9% 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 Q2 Earnings & Revenues Up Y/Y
Vishay Intertechnology reported second-quarter 2022 adjusted earnings of 82 cents per share, which surpassed the Zacks Consensus Estimate by 26.2% and rose 34.4% year over year.
Revenues of $863.5 million increased 5.4% year over year. The figure surpassed the Zacks Consensus Estimate of $856.9 million.
The strong performance of resistor, inductor, diode, capacitor and opto product lines drove year-over-year revenue growth in the reported quarter.
However, the extended impacts of the pandemic-induced shutdown of the company’s facilities in China in the second quarter remained concerning.
Vishay’s book-to-bill ratio was 1.07 at the end of the second quarter.
Product Segments in Detail
Resistors: The segment generated revenues of $230 million (25% of the total revenues), up 16% 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 1.05 in the reported quarter.
Inductors: The product line generated revenues of $90 million (10% of the 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 0.97 at the end of the reported quarter.
MOSFET: The product line generated revenues of $158 million (18% of the total revenues), decreasing 4% year over year. This was due to the pandemic-induced plant and warehouse shutdowns in Shanghai. The book-to-bill ratio for the product line was 1.14 at the end of the reported quarter.
Capacitors: The product line generated revenues of $132 million (15% of the total revenues), up 7% year over year. The book-to-bill ratio for the product line was 1.17 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 (22% of the total revenues), up 14% 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 (10% of the total revenues) in the reported quarter. The figure was up 9% from the year-ago quarter, owing to a strong demand environment. The book-to-bill ratio for the product line was 0.86 for the period.
Operating Details
In second-quarter 2022, the gross margin was 30.3%, expanding 230 basis points (bps) on a year-over-year basis.
Selling, general and administrative expenses were $110.4 million, increasing 6.3% year over year. As a percentage of the total revenues, the figure expanded 10 bps from the year-ago quarter to 12.8%.
The operating margin expanded 220 bps on a year-over-year basis to 17.5%.
Balance Sheet & Cash Flows
As of Jul 2, 2022, cash and cash equivalents were $765.6 million, down from $789.2 million as of Mar 31, 2022. Short-term investments were $81.1 million, down from $96.6 million in the previous quarter. Inventories were $633.8 million, up from $602.9 million in the prior quarter.
Long-term debt was $463.3 million at the end of the second quarter compared with $456.5 million at the end of the first quarter.
In the reported quarter, Vishay generated $74.7 million of cash from operations, up from $33.6 million in the previous quarter.
The company’s free cash flow in the second quarter was $15.2 million. Vishay returned $40.6 million to stockholders, of which $14.3 million was paid out as dividends and $26.3 million was for stock repurchases.
Guidance
For third-quarter 2022, Vishay expects total revenues of $860-$900 million. The company anticipates a third-quarter gross margin of 29% (+/-50 bps).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 10.87% due to these changes.
VGM Scores
Currently, Vishay has a nice Growth Score of B, a grade with the same score on the momentum front. 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 trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Vishay has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Vishay (VSH) Down 5.9% Since Last Earnings Report?
A month has gone by since the last earnings report for Vishay Intertechnology (VSH - Free Report) . Shares have lost about 5.9% 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 Q2 Earnings & Revenues Up Y/Y
Vishay Intertechnology reported second-quarter 2022 adjusted earnings of 82 cents per share, which surpassed the Zacks Consensus Estimate by 26.2% and rose 34.4% year over year.
Revenues of $863.5 million increased 5.4% year over year. The figure surpassed the Zacks Consensus Estimate of $856.9 million.
The strong performance of resistor, inductor, diode, capacitor and opto product lines drove year-over-year revenue growth in the reported quarter.
However, the extended impacts of the pandemic-induced shutdown of the company’s facilities in China in the second quarter remained concerning.
Vishay’s book-to-bill ratio was 1.07 at the end of the second quarter.
Product Segments in Detail
Resistors: The segment generated revenues of $230 million (25% of the total revenues), up 16% 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 1.05 in the reported quarter.
Inductors: The product line generated revenues of $90 million (10% of the 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 0.97 at the end of the reported quarter.
MOSFET: The product line generated revenues of $158 million (18% of the total revenues), decreasing 4% year over year. This was due to the pandemic-induced plant and warehouse shutdowns in Shanghai. The book-to-bill ratio for the product line was 1.14 at the end of the reported quarter.
Capacitors: The product line generated revenues of $132 million (15% of the total revenues), up 7% year over year. The book-to-bill ratio for the product line was 1.17 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 (22% of the total revenues), up 14% 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 (10% of the total revenues) in the reported quarter. The figure was up 9% from the year-ago quarter, owing to a strong demand environment. The book-to-bill ratio for the product line was 0.86 for the period.
Operating Details
In second-quarter 2022, the gross margin was 30.3%, expanding 230 basis points (bps) on a year-over-year basis.
Selling, general and administrative expenses were $110.4 million, increasing 6.3% year over year. As a percentage of the total revenues, the figure expanded 10 bps from the year-ago quarter to 12.8%.
The operating margin expanded 220 bps on a year-over-year basis to 17.5%.
Balance Sheet & Cash Flows
As of Jul 2, 2022, cash and cash equivalents were $765.6 million, down from $789.2 million as of Mar 31, 2022. Short-term investments were $81.1 million, down from $96.6 million in the previous quarter. Inventories were $633.8 million, up from $602.9 million in the prior quarter.
Long-term debt was $463.3 million at the end of the second quarter compared with $456.5 million at the end of the first quarter.
In the reported quarter, Vishay generated $74.7 million of cash from operations, up from $33.6 million in the previous quarter.
The company’s free cash flow in the second quarter was $15.2 million. Vishay returned $40.6 million to stockholders, of which $14.3 million was paid out as dividends and $26.3 million was for stock repurchases.
Guidance
For third-quarter 2022, Vishay expects total revenues of $860-$900 million. The company anticipates a third-quarter gross margin of 29% (+/-50 bps).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 10.87% due to these changes.
VGM Scores
Currently, Vishay has a nice Growth Score of B, a grade with the same score on the momentum front. 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 trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Vishay has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.