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Why Is Vishay (VSH) Up 7.3% 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 7.3% 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 Q3 Earnings Beat Estimates, Revenues Down Y/Y
Vishay Intertechnology delivered third-quarter 2023 adjusted earnings of 60 cents per share, surpassing the Zacks Consensus Estimate by 7.1%. The figure fell 35.5% year over year.
Revenues of $853.7 million decreased 7.7% year over year. The figure lagged the Zacks Consensus Estimate of $859.4 million.
Softness in MOSFETs, diodes, optoelectronics, resistor and capacitor product lines was a major concern.
Vishay’s book-to-bill ratio was 0.63 at the end of the third quarter.
Product Segments in Detail
Resistors: The segment generated revenues of $199.9 million (23% of the total revenues), down 3.6% year over year. The figure missed the Zacks Consensus Estimate of $216 million. The book-to-bill was 0.65.
Inductors: The product line generated revenues of $89.9 million (10.5% of the total revenues), which increased 7.7% on a year-over-year basis. The figure came ahead of the Zacks Consensus Estimate of $76 million. The book-to-bill was 0.85.
MOSFET: The product line generated revenues of $205 million (24% of the total revenues), decreasing 9% year over year. The figure beat the Zacks Consensus Estimate of $204 million. The book-to-bill was 0.50.
Capacitors: The product line generated revenues of $117.6 million (14% of the total revenues), down 6.8% year over year. The figure came below the Zacks Consensus Estimate of $123 million. The book-to-bill was 0.75.
Diodes: The segment generated revenues of $176.8 million (21% of the total revenues), down 15.4% from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $172 million. The book-to-bill was 0.58.
Optoelectronics: The product line generated revenues of $64.4 million (7.5% of the total revenues) in the reported quarter. The figure came below the Zacks Consensus Estimate of $66 million. The figure was down 12.3% from the year-ago quarter. The book-to-bill was 0.57.
Operating Details
In third-quarter 2023, the gross margin was 27.8%, contracting 350 basis points (bps) on a year-over-year basis.
Selling, general and administrative expenses were $122.5 million, increasing 15.1% year over year. As a percentage of total revenues, the figure expanded 290 bps from the year-ago quarter to 14.4%.
The operating margin contracted 630 bps on a year-over-year basis to 13.5%.
Balance Sheet & Cash Flows
As of Sep 30, 2023, cash and cash equivalents were $1.095 billion, up from $1.089 billion as of Jul 1, 2023. Short-term investments were $78.9 million, up from $14.4 million at the end of the prior quarter.
Long-term debt was $817.3 million at the end of third-quarter 2023 compared with $639.7 million at the end of second-quarter 2023.
The company generated $122.3 million in cash from operations in the reported quarter, up from $107.2 million in the previous quarter.
In the third quarter, capital expenditures were $66.8 million. Also, free cash flow was $55.5 million.
Guidance
For fourth-quarter 2023, Vishay expects total revenues of $770-$810 million.
VSH anticipates a fourth-quarter gross margin of 25.5% (+/-50 bps).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Vishay has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, 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 these revisions 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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Why Is Vishay (VSH) Up 7.3% 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 7.3% 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 Q3 Earnings Beat Estimates, Revenues Down Y/Y
Vishay Intertechnology delivered third-quarter 2023 adjusted earnings of 60 cents per share, surpassing the Zacks Consensus Estimate by 7.1%. The figure fell 35.5% year over year.
Revenues of $853.7 million decreased 7.7% year over year. The figure lagged the Zacks Consensus Estimate of $859.4 million.
Softness in MOSFETs, diodes, optoelectronics, resistor and capacitor product lines was a major concern.
Vishay’s book-to-bill ratio was 0.63 at the end of the third quarter.
Product Segments in Detail
Resistors: The segment generated revenues of $199.9 million (23% of the total revenues), down 3.6% year over year. The figure missed the Zacks Consensus Estimate of $216 million. The book-to-bill was 0.65.
Inductors: The product line generated revenues of $89.9 million (10.5% of the total revenues), which increased 7.7% on a year-over-year basis. The figure came ahead of the Zacks Consensus Estimate of $76 million. The book-to-bill was 0.85.
MOSFET: The product line generated revenues of $205 million (24% of the total revenues), decreasing 9% year over year. The figure beat the Zacks Consensus Estimate of $204 million. The book-to-bill was 0.50.
Capacitors: The product line generated revenues of $117.6 million (14% of the total revenues), down 6.8% year over year. The figure came below the Zacks Consensus Estimate of $123 million. The book-to-bill was 0.75.
Diodes: The segment generated revenues of $176.8 million (21% of the total revenues), down 15.4% from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $172 million. The book-to-bill was 0.58.
Optoelectronics: The product line generated revenues of $64.4 million (7.5% of the total revenues) in the reported quarter. The figure came below the Zacks Consensus Estimate of $66 million. The figure was down 12.3% from the year-ago quarter. The book-to-bill was 0.57.
Operating Details
In third-quarter 2023, the gross margin was 27.8%, contracting 350 basis points (bps) on a year-over-year basis.
Selling, general and administrative expenses were $122.5 million, increasing 15.1% year over year. As a percentage of total revenues, the figure expanded 290 bps from the year-ago quarter to 14.4%.
The operating margin contracted 630 bps on a year-over-year basis to 13.5%.
Balance Sheet & Cash Flows
As of Sep 30, 2023, cash and cash equivalents were $1.095 billion, up from $1.089 billion as of Jul 1, 2023. Short-term investments were $78.9 million, up from $14.4 million at the end of the prior quarter.
Long-term debt was $817.3 million at the end of third-quarter 2023 compared with $639.7 million at the end of second-quarter 2023.
The company generated $122.3 million in cash from operations in the reported quarter, up from $107.2 million in the previous quarter.
In the third quarter, capital expenditures were $66.8 million. Also, free cash flow was $55.5 million.
Guidance
For fourth-quarter 2023, Vishay expects total revenues of $770-$810 million.
VSH anticipates a fourth-quarter gross margin of 25.5% (+/-50 bps).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Vishay has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, 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 these revisions 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.