Vishay Intertechnology (VSH) Q1 Earnings Top, Revenues Up Y/Y

Vishay Intertechnology, Inc. (NYSE:VSH) delivered first-quarter 2019 adjusted earnings of 51 cents per share, which surpassed the Zacks Consensus Estimate by 1 cent. The figure surged 27.5% year over year but declined 12.1% sequentially.

Revenues increased 4% on a year-over-year basis but decreased 3.9% on a sequential basis to $745.16 million.

The company’s robust product portfolio, on account of strong performance of resistors & inductors, capacitors and MOSFET product lines during the reported quarter, drove year-over-year top-line growth.

Further, solid momentum across the end-markets also remained positive. However, the company continued to suffer from weak performance by opto products.

We note that the reported revenue figure missed the Zacks Consensus Estimate of $750 million.

Vishay’s book-to-bill ratio of the company was 0.79 at the end of the first quarter.

The company experienced normalization in its backlogs and inventories as supply has started to catch up with demand. This is likely to continue which in turn will impact the company’s revenues in the near term as a result of reduction in inventories by distributors.

Following the release of first quarter results, the stock has plunged 3.4%. Further, shares of Vishay have lost 18.2% over a year against the industry’s rally of 24.7%.

Product Segments in Detail

Resistors & Inductors: This product segment generated $256 million revenues (34.4% of total revenues), up 8% year over year. The product’s robust performance across automotive, industrial, medical and military end markets continued to accelerate revenues from this product line. Moreover, positive contributions from the acquisition of UltraSource drove sales of this product. The book-to-bill ratio for this product is at 0.92 in the reported quarter.

MOSFET: This product line generated $137 million revenues (18.4% of total revenues), advancing 9% year over year. The book-to-bill ratio for this product stood at 0.84 at the end of the reported quarter. The company continued to witness sustained performance of this product line in the automotive end market. Additionally, expanding internal and foundry capacities for MOSFETs are tailwinds.

Capacitors: The company generated $119 million revenues (16% of total revenues) from the sale of this product line, up 17% year over year. Continued solid momentum with this product line in America and Europe remained positive throughout the quarter under review. Further, growing opportunities for capacitors in the areas of power transmission, electro cars and military are tailwinds. Moreover, governmental programs in China continued to aid revenue generation in this product segment during the first quarter. The book-to-bill ratio for this product stood at 0.67 in the reported quarter.

Diodes: The company yielded $168 million revenues (23% of total revenues) from this product segment, improving 3% from the year-ago quarter. The strong momentum of this product in the automotive and industrial sector continued to accelerate its sales. The book-to-bill ratio for this product stood at 0.63 during the quarter under review.

Optoelectronics: This product line generated $61 million revenues (8.2% of total revenues) during the reported quarter. The figure was down 14% from the year-ago quarter. The book-to-bill ratio for this product stood at 0.83 during the first quarter. The segment’s top line was hurt by unfavorable product mix and declining inventories.

Operating Details

In first-quarter 2019, gross margin came in at 28.3%, contracting 30 bps on a year-over-year basis.

Selling, general and administrative expenses were $103.4 million, increasing 2.2% year over year. However, as a percentage of total revenues, the figure contracted 20 bps from the year-ago quarter.

Per management, operating income was $107.7 million, up 3.5% from the prior-year quarter. Operating margin came in 14.5% which remained flat on a year-over-year basis. Further, adjusted EBITDA margin was 19.8%, expanding 50 bps year over year.