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Vishay Intertechnology (VSH) Beats on Q2 Earnings & Revenues

Vishay Intertechnology, Inc.VSH delivered third-quarter 2018 adjusted earnings of 60 cents per share, which surpassed the Zacks Consensus Estimate by 6 cents. The figure also surged 42.8% on a year-over-year basis and 11.1% sequentially.

Revenues increased 15.2% year over year and 2.6% on a sequential basis to $780.97 million. The figure also comfortably outpaced the Zacks Consensus Estimate of $777.65 million.

The company's strong performance in automotive and industrial markets drove year-over-year growth. Moreover, strengthening demand conditions in Americas and Europe aided the top line in the reported quarter.

Additionally, the book-to-bill ratio of the company was 0.95 at the end of the reported quarter. Further, expanding manufacturing capacities across all product segments contributed well to the company's quarterly results.

However, shortage of supply still remains a major concern in the healthy demand market.

Notably, shares of Vishay Intertechnology have lost 12.9% on a year-to-date basis compared with the industry 's decline of 4.2%.

Product Segments in Detail

Resistors & Inductors: This product segment generated $253 million revenues (32.4% of total revenues), up 17% year over year. The product's robust performance across automotive, industrial, medical and military end markets contributed well to the acceleration of revenues from this product line. Moreover, positive contributions from the acquisition of UltraSource drove the sales of this product. The book-to-bill ratio for this product is pegged at 1.02 during the quarter.

MOSFET: This product line generated $144 million revenues (18.4% of total revenues) which grew 14% year over year. The book-to-bill ratio for this product stood at 0.88% at the end of the reported quarter. The company witnessed sustained performance of this product line in the automotive end market. Further, robust MOSFET transistors continued to aid its market position.

Capacitors: The company generated $116 million revenues (15% of total revenues) from the sale of this product line, up 22% year over year. Continued solid momentum with this product line across Asia, especially in China remained positive throughout the quarter under review. Further, strengthening demand for this product in America and Europe aided sales growth. The book-to-bill ratio for this product was pegged at 1.03 during the reported quarter.

Diodes: The company yielded $187 million revenues (24% of total revenues) from this product segment, surging 16% 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 was pegged at 0.86% during the quarter under review.

Optoelectronics: This product line generated $76 million revenues (9.7% of total revenues) during the reported quarter. The figure inched up 1% from the year-ago quarter. The book-to-bill ratio for this product was pegged at 0.88 during the third quarter. The company continued to benefit from the persistent strong performance of this product line in the automotive applications space.

Vishay Intertechnology, Inc. Price, Consensus and EPS Surprise

Vishay Intertechnology, Inc. Price, Consensus and EPS Surprise | Vishay Intertechnology, Inc. Quote

Operating Details

In third-quarter 2018, gross margin came in at 30.3%, expanding 230 basis points (bps) on a year-over-year basis. This is attributable to rising selling prices during the reported quarter. Further, strong performance of resistors & inductors, diodes, capacitors and opto product lines led to margin expansion.

Selling, general and administrative expenses were $98.2 million, increasing 7.3% year over year. However, as a percentage of total revenues, the figure contracted 90 bps from the year-ago quarter.

Per the company, operating margin came in at 17.7%, expanding 360 bps from the year-ago quarter. Adjusted EBITDA margin was 22.4%, expanding 240 bps year over year.

Balance Sheet & Cash Flows

As of Sep 29, 2018, cash and cash equivalents were $928.1 million, declining from $1 billion as of Jun 30, 2018. Short-term investments were $135 million, down from $142.7 million in the previous quarter. Inventories were $500.3 million, up 4.2% sequentially.

In the third quarter, the company generated $70.7 million of cash from operations against $8.7 million of cash that was used in operations in the last reported quarter.

The company's free cash flow in the third quarter came in $21.05 million.

Guidance

For fourth-quarter 2018, Vishay Intertechnology expects total revenues to be in the range of $745 to $785 million. The Zacks Consensus Estimate for revenues is pegged at $774.15 million.

Further, the company anticipates gross margin to lie between the range of 28% and 29.5%.

Zacks Rank and Other Stocks to Consider

Vishay Intertechnology flaunts a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader technology sector are Upland Software UPLD , Ringcentral RNG and AMETEK AME . While Upland Software and Ringcentral sport a Zacks Rank #1 (Strong Buy), AMETEK carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

Long-term earnings growth rate for Upland Software, Ringcentral and AMETEK is currently pegged at 20%, 28.83% and 10.97%, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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