Vishay (VSH) Q4 Earnings Miss Estimates, Revenues Fall Y/Y
Zacks Investment Research | Feb 05, 2020 09:56PM ET
Vishay Intertechnology, Inc. (NYSE:VSH) reported fourth-quarter 2019 adjusted earnings of 13 cents per share, which missed the Zacks Consensus Estimate by 31.6%. Further, the figure declined 77.6% year over year and 50% sequentially.
Revenues of $609.6 million surpassed the Zacks Consensus Estimate of $600 million. However, the figure was down 21.4% from the year-ago quarter and 3% from the prior quarter.
The company suffered from weakening demand from distributors thanks to high level of inventories in the supply chain. Further, this impacted the company’s performance in Europe negatively. Moreover, softness in American market remained a major headwind.
Additionally, weakening momentum across automotive and commercial aviation fields was a concern. Further, slowdown in the global auto production remained a woe.
Notably, Vishay’s book-to-bill ratio was 0.94 at the end of the fourth quarter.
The company anticipates high level of inventories in the supply chain to persist as a headwind in the days ahead.
Coming to price performance, Vishay has lost 3.3% in the past year against the Vishay Intertechnology, Inc. Quote
Operating Details
In fourth-quarter 2019, gross margin came in at 22.2%, contracting 610 basis points (bps) on a year-over-year basis. This can be attributed to an unfavorable product mix and increasing variable costs.
Selling, general and administrative expenses were $94.3 million, declining 5.7% year over year. However, as a percentage of total revenues, the figure expanded 260 bps from the year-ago quarter.
Consequently, operating margin declined significantly to 4% compared with 15.4% in the year-ago quarter.
Balance Sheet & Cash Flows
As of Dec 31, 2019, cash and cash equivalents were $694.1 million, decreasing from $731.5 million as of Sep 28, 2019. Short-term investments were $108.8 million, up from $56 million in the previous quarter. Inventories were $431.7 million, down from $444.6 million in the previous quarter.
In the fourth quarter, the company generated $84.4 million of cash from operations, up from $76.2 million in the previous quarter.
The company’s free cash flow in the reported quarter came in $28.1 million, decreasing from $46.1 million in the prior quarter.
Guidance
For first-quarter 2020, Vishay expects total revenues in the range of $605 million to $645 million.
Further, the company projects the first-quarter gross margin at 24%.
Zacks Rank & Key Picks
Vishay currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector are Itron, Inc. (NASDAQ:ITRI) , NetEase, Inc. (NASDAQ:NTES) and Five9, Inc. (NASDAQ:FIVN) . All the three stocks carry a Zacks Rank #2 (Buy). You can see Zacks Investment Research
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