Vishay Intertechnology (VSH) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $741.2 million, flat sequentially but down from $892.1 million in Q2 2023, reflecting ongoing inventory destocking, macroeconomic headwinds, and schedule adjustments in automotive.

• Gross margin was 22.0%, down from 28.9% a year ago, with a negative impact of 170–200 basis points from the Newport acquisition.

• EPS for the quarter was $0.17, down from $0.22 in Q1 and $0.68 in Q2 2023.

• Book-to-bill ratio was 0.86 overall (0.82 for semiconductors, 0.90 for passives); backlog at quarter end was 4.6 months.

• Industry recovery is slower than expected, delaying expansion projects and impacting revenue growth.

Financial highlights

• Operating margin was 5.1%, down from 15.1% in Q2 2023; EBITDA was $88.4 million (11.9% margin), down from 19.9% a year ago.

• Net earnings attributable to stockholders were $23.5 million, compared to $95.0 million in Q2 2023.

• Free cash flow was negative, impacted by high capital expenditures and tax payments on repatriated earnings.

• Cash and cash equivalents at quarter end were $672.7 million, with net cash and short-term investments (debt) at $(132.6) million.

• Dividends and share repurchases for the first half of 2024 totaled $52.6 million.

Outlook and guidance

• Q3 2024 revenue expected between $725 million and $765 million, with gross margin guidance at 21.0% ±50 basis points and Newport expected to drag by 175–200 basis points.

• 2024 capital expenditures planned between $360 million and $390 million, revised down from earlier guidance.

• Free cash flow expected to remain negative for the year, with revolver draw anticipated.

• FY 2024 normalized effective tax rate projected at 31%.

• Stockholder return policy targets at least $100 million in returns for FY 2024.