Vishay (VSH) Up 7.4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Vishay Intertechnology (VSH). Shares have added about 7.4% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Vishay Q4 Earnings Beat Estimates, Revenues Down Y/Y
Vishay Intertechnology, Inc. (VSH) delivered fourth-quarter 2023 adjusted earnings of 37 cents per share, surpassing the Zacks Consensus Estimate by 2.8%. The figure fell 27.5% year over year.
Revenues of $785.24 million decreased 8.2% year over year. The figure beat the Zacks Consensus Estimate of $778.75 million.
Softness in MOSFETs, diodes, optoelectronics, resistor and capacitor product lines was a major concern.
Vishay’s book-to-bill ratio was 0.75 at the end of the fourth quarter.
Product Segments in Detail
Resistors: The segment generated revenues of $198 million (25.2% of the total revenues), down 3.5% year over year. The figure beat the Zacks Consensus Estimate of $183.02 million. The book-to-bill was 0.82.
Inductors: The product line generated revenues of $87.9 million (11.2% of the total revenues), which increased 16.9% on a year-over-year basis. The figure came ahead of the Zacks Consensus Estimate of $71.26 million. The book-to-bill was 0.91.
MOSFET: The product line generated revenues of $168.2 million (21.4% of the total revenues), decreasing 18.3% year over year. The figure beat the Zacks Consensus Estimate of $203.01 million. The book-to-bill was 0.62.
Capacitors: The product line generated revenues of $114 million (14.5% of the total revenues), down 7.5% year over year. The figure beat the Zacks Consensus Estimate of $113.95 million. The book-to-bill was 0.95.
Diodes: The segment generated revenues of $163.3 million (20.8% of the total revenues), down 10.2% from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $158.4 million. The book-to-bill was 0.61.
Optoelectronics: The product line generated revenues of $53.9 million (6.9% of the total revenues), down 15.8% from the year-ago quarter. The figure came below the Zacks Consensus Estimate of $55.4 million. The figure decreased 12.3% from the year-ago quarter. The book-to-bill was 0.59.
Operating Details
In fourth-quarter 2023, the gross margin was 25.6%, contracting 350 basis points (bps) on a year-over-year basis.
Selling, general and administrative expenses were $122.8 million, increasing 7.9% year over year. As a percentage of total revenues, the figure expanded 230 bps from the year-ago quarter to 15.6%.
The operating margin contracted 590 bps on a year-over-year basis to 9.9%.
Balance Sheet & Cash Flows
As of Dec 31, 2023, cash and cash equivalents were $972.7 million, down from $1.1 billion as of Sep 30, 2023. Short-term investments were $35.8 million, down from $78.9 million at the end of the prior quarter.
Long-term debt was $818.2 million at the end of fourth-quarter 2023 compared with $817.3 million at the end of third-quarter 2023.
The company generated $6.3 million in cash from operations in the reported quarter, down from $122.3 million in the previous quarter.
In the fourth quarter, capital expenditures were $145.3 million. Also, free cash outflow was $138.9 million.
Guidance
For first-quarter 2024, Vishay expects total revenues of $715-$755 million.
VSH anticipates a first-quarter gross margin of 24.0% (+/-50 bps).
The company anticipates first-quarter selling, general and administrative expenses in the range of $128-$132 million.
For 2024, Vishay expects a normalized effective tax rate of 31%.
The company anticipates 2024 selling, general and administrative expenses in the range of $523-$533 million at currency exchange rates.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -36.36% due to these changes.
VGM Scores
At this time, Vishay has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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. It's no surprise Vishay has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Vishay is part of the Zacks Semiconductor - Discretes industry. Over the past month, Wolfspeed (WOLF), a stock from the same industry, has gained 2.3%. The company reported its results for the quarter ended December 2023 more than a month ago.
Wolfspeed reported revenues of $208.4 million in the last reported quarter, representing a year-over-year change of -3.6%. EPS of -$0.55 for the same period compares with -$0.11 a year ago.
For the current quarter, Wolfspeed is expected to post a loss of $0.64 per share, indicating a change of -392.3% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Wolfspeed. Also, the stock has a VGM Score of F.
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