What happened
Vishay Intertechnology(NYSE: VSH) stock is making big gains in Wednesday's trading. The semiconductor and electronic-components company's share price was up roughly 12.8% in the daily session as of noon ET, according to data from S&P Global Market Intelligence.
Vishay published its Q1 results before the market opened today, delivering sales and earnings performance that came in better than what Wall Street had been expecting. The company recorded earnings per share of $0.79 on sales of $871 million, crushing the average analyst estimate's call for per-share earnings of $0.49 on revenue of roughly $846 million.
So what
While sales grew only 2% year over year in the quarter, Vishay saw its product makeup in the period help deliver earnings results that far surpassed the market's expectations. The company saw sales increases for its medical and aerospace-defense products, as well as sustained demand in the automotive category. Vishay posted a gross margin of 32% in the period, up from 30.3% in the prior-year quarter and 29.1% in Q4.
Not only did the company post surprisingly strong earnings and margins performance last quarter, it also issued forward guidance that topped Wall Street's average estimate.
Now what
Vishay is guiding for second-quarter sales to come in between $860 million and $900 million, with the midpoint of that target suggesting growth of roughly 2% year over year. The company's gross margin for the period is projected to come in between 28.5% and 29.5%. Meanwhile, the average analyst estimate had guided for sales of $832.1 million and a gross margin in line with the company's target.
In response to accelerating customer demand in some categories, Vishay has increased investments in boosting production capacity for 30 of its key product lines. The company sees 2023 as a staging year, but these initiatives to capitalize on trends in the connectivity and mobility spaces could lead to stronger sales growth down the line.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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