On August 7, 2024, Vishay Intertechnology Inc (VSH, Financial) released its 8-K filing for the fiscal second quarter ended June 29, 2024. Vishay Intertechnology Inc provides a broad product portfolio of discrete semiconductors and passive electronic components to original equipment manufacturers and distributors. These products are found in industrial, computing, automotive, consumer, telecommunications, power supplies, military, aerospace, and medical markets and serve customers worldwide. Its product segments consist of two general classes: semiconductors and passive components. The company's operating segment includes metal oxide semiconductor field-effect transistors, diodes, optoelectronic components, resistors, inductors, and capacitors. Revenue mainly comes from resistors, which are basic components used in all forms of electronic circuitry to adjust and regulate levels of voltage and current.
Performance Overview
Vishay Intertechnology Inc (VSH, Financial) reported net revenues of $741.24 million for Q2 2024, slightly below the analyst estimate of $754.71 million. The company also reported earnings per share (EPS) of $0.17, missing the analyst estimate of $0.18. This performance reflects a challenging quarter, with revenue remaining flat quarter over quarter, primarily due to schedule agreement adjustments by automotive Tier 1 customers.
Joel Smejkal, President and CEO, commented, "During the second quarter, we executed well on our Vishay 3.0 strategic plan, deepening our customer engagements supported by capacity that has landed and that we will continue to expand, and advancing our silicon carbide strategy as we prepare for the megatrends in sustainability and e-mobility."
Financial Achievements and Challenges
Despite the flat revenue, Vishay Intertechnology Inc (VSH, Financial) managed to maintain a gross profit margin of 22.0%, although this is a decline from the 22.8% reported in the previous quarter and significantly lower than the 28.9% from the same quarter last year. The company’s operating income also saw a decline, coming in at $37.92 million, down from $42.67 million in the previous quarter and $134.62 million in Q2 2023.
The company faces challenges as the industry recovery is taking longer than expected. This has led to adjustments in their expansion projects, particularly the Itzehoe, Germany expansion, which has been pushed beyond 2024. However, Vishay remains committed to its planned capital investment of $2.6 billion between 2023 and 2028, with $360 million to $390 million earmarked for 2024.
Income Statement Highlights
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Net Revenues | $741.24 million | $746.28 million | $892.11 million |
| Gross Profit | $162.87 million | $170.41 million | $257.47 million |
| Operating Income | $37.92 million | $42.67 million | $134.62 million |
| Net Earnings | $23.88 million | $31.44 million | $95.42 million |
| EPS | $0.17 | $0.22 | $0.68 |
Balance Sheet and Cash Flow
As of June 29, 2024, Vishay Intertechnology Inc (VSH, Financial) reported total assets of $4.15 billion, a slight decrease from $4.24 billion at the end of 2023. The company’s cash and cash equivalents stood at $672.73 million, down from $972.72 million at the end of 2023. This decrease is primarily due to significant capital expenditures and investments in property and equipment.
Net cash provided by operating activities for the first six months of 2024 was $55.48 million, a significant drop from $237.13 million in the same period last year. This decline is attributed to lower net earnings and changes in operating assets and liabilities.
Outlook and Future Plans
For the third quarter of 2024, Vishay Intertechnology Inc (VSH, Financial) expects revenues in the range of $745 million +/- $20 million, with a gross profit margin of 21.0% +/- 50 basis points. The company continues to focus on its strategic initiatives, including the expansion of its silicon carbide strategy and capacity enhancements to support future growth.
Overall, while Vishay Intertechnology Inc (VSH, Financial) faces challenges due to the slower-than-expected industry recovery, the company remains committed to its long-term strategic goals and capital investment plans. Investors will be closely watching the company's performance in the coming quarters to gauge the effectiveness of its strategic initiatives and its ability to navigate the current market conditions.
Explore the complete 8-K earnings release (here) from Vishay Intertechnology Inc for further details.
