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01/10 16:15
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture: strong order intake (book-to-bill ratio at 1.08), positive shareholder returns, and a cultural shift towards customer-centricity are positives. However, flat revenue, declining margins, and unclear demand visibility beyond Q2 are concerns. The Q&A reveals management's cautious optimism but also highlights uncertainties, especially regarding tariffs and AI business potential. The market cap suggests moderate volatility, leading to a neutral prediction (-2% to 2%) for the stock price over the next two weeks.
Revenue $715 million, flat compared to the fourth quarter; decreased $31 million year-over-year due to a 3% reduction in ASPs and a 1% exchange rate impact.
Gross Profit $136 million, resulting in a gross margin of 19.0%, down 90 basis points from the fourth quarter due to lower average selling prices.
GAAP Operating Margin 0.1%, compared to -7.9% in the fourth quarter and 5.7% in Q1 2024.
EBITDA $54 million, with an EBITDA margin of 7.6%, down from an adjusted EBITDA margin of 9.3% in the fourth quarter.
GAAP Loss Per Share -$0.03, compared to -$0.49 in the fourth quarter and $0.22 in Q1 2024.
Free Cash Flow -$45 million, an improvement from -$76 million in the fourth quarter.
Operating Cash Generated $16 million for the first quarter.
Total CapEx $62 million, including $54 million for capacity expansion projects.
Inventory $712 million, resulting in inventory days outstanding of 110 days, up one day from the fourth quarter.
Book-to-Bill Ratio 1.08, with 1.12 for semis and 1.04 for passives, indicating positive order intake.
Stockholder Returns $26.1 million, consisting of $13.6 million for dividends and $12.5 million for share repurchases.
Global Cash and Short-term Investments $620 million, with $218 million outstanding on the revolver.
New Product Releases: Released additional three products in silicon carbide technology, bringing total to eight products. Released Gen 2 1,200-volt planar for industrial and automotive applications.
AI Product Development: Increased relationships with contract manufacturers to offer product technology advice for power management in AI chipsets.
Reference Designs: Released reference designs for automotive applications into catalog distribution, with several automotive OEMs and Tier 1s sampling.
Market Expansion in Smart Grid: Demand remained strong for smart grid infrastructure multiyear projects in Europe and Asia, winning two new programs.
Automotive Market Positioning: Positioned well to drive volume in automotive with increasing electronic content in hybrid powertrains.
AI Market Growth: Shipment quantities increased in Q1 to support demand for AI servers and server power projects, particularly in Taiwan and China.
Operational Efficiency in Tariff Management: Implemented procedures since 2018 to pass along tariff adders to customers, limiting the impact on gross profit.
Capacity Expansion: Plan to spend between $300 million to $350 million in 2025, with at least 70% for capacity expansion projects.
Inventory Management: Total distribution inventory weeks decreased from 27 weeks to 26 weeks, indicating improved inventory management.
Vishay 3.0 Strategic Plan: Continued execution of the five-year strategic plan to achieve financial goals of faster revenue growth and improved profitability.
Customer Engagement Strategy: Engaging with new and existing customers early in their design pipeline to increase component share on boards.
Tariffs: Vishay has assessed the worldwide impact of evolving tariffs, noting that while tariffs are higher and the number of affected customers has increased, their exposure to these tariffs is limited. They have systems in place to pass along tariff costs to customers, which may reduce gross margins by approximately 30 basis points.
Supply Chain Challenges: The company faces ongoing issues in the mechanical parts supply chain, particularly affecting the aerospace and defense sector, which has led to a decline in revenue from this segment.
Economic Factors: Global economic uncertainties are acknowledged, but the company remains optimistic about growth due to improving demand signals and inventory normalization. However, customer demand visibility beyond the second quarter is not clear, indicating potential risks.
Competitive Pressures: Vishay's competitive landscape is influenced by its hybrid passives and semiconductor business model, which differs from competitors focused solely on semiconductors. This positioning may provide some advantages but also presents challenges in navigating tariff impacts.
Inventory Management: The company has noted that some customers have overcorrected inventory levels, which could lead to fluctuations in order intake and revenue.
Vishay 3.0: Vishay continues to execute its five-year strategic plan, focusing on increasing capacity and leveraging growth levers to support market upturns.
Capacity Expansion: For 2025, Vishay plans to spend between $300 million to $350 million, with at least 70% allocated to capacity expansion projects for high-growth product lines.
Silicon Carbide Strategy: Vishay is advancing its silicon carbide technology, with multiple product releases planned for 2025, including automotive-grade components.
Solution Selling Initiative: Vishay is engaging with customers early in their design pipeline to increase the share of components supplied, enhancing customer value.
Q2 2025 Revenue Guidance: Vishay expects Q2 2025 revenues to be $760 million, plus or minus $20 million, representing a 3% volume increase.
Gross Margin Guidance: Gross margin for Q2 2025 is expected to be in the range of 19.0%, plus or minus 50 basis points, including tariff impacts.
CapEx Guidance: Total CapEx for Q1 2025 was $62 million, with a focus on capacity expansion projects.
Free Cash Flow Guidance: For 2025, Vishay expects negative free cash flow due to capacity expansion plans, while maintaining dividends and opportunistic share repurchases.
Quarterly Dividend: $13.6 million for the quarterly dividend.
Share Repurchases: $12.5 million for share repurchases, with 0.7 million shares repurchased at an average price of $17.21 per share.
Stockholder Return Policy: The policy calls for returning at least 70% of free cash flow to stockholders in the form of dividends and stock repurchases.
2025 Shareholder Return Expectations: For 2025, the company expects to maintain its dividend and opportunistically repurchase shares based on U.S. available liquidity.
The earnings call presented mixed signals: revenue and EBITDA improved, but gross margins and book-to-bill ratios were slightly concerning. The Q&A highlighted management's uncertainty on key issues like export restrictions and margin impacts, while also noting no share buybacks due to liquidity constraints. However, the positive revenue growth and margin expansion outlook for 2025, along with improved cash flow, provide a balanced view. Considering the market cap, the stock is likely to experience minimal movement, resulting in a neutral sentiment prediction.
The earnings call reveals strong financial performance across multiple segments, with record high revenues in sectors like AI and industrials. The management's guidance is optimistic, expecting improved margins and a stronger second half of the year. Despite negative free cash flow due to capacity expansion, the strategic focus on growth and customer expansion in AI is promising. The Q&A session supports this positive outlook, highlighting corrected inefficiencies and expanding AI customer base with major tech companies. Given the market cap, the stock is likely to react positively, with a projected increase of 2% to 8%.
The earnings call presented a mix of positive and negative indicators. While the book-to-bill ratio and stockholder returns are positive, revenue and gross profit declines, alongside unclear guidance on AI business size, are concerning. The Q&A session highlighted some optimism for future quarters, but economic uncertainties and flat revenue in key regions temper expectations. With a market cap over $3 billion, the stock's movement is likely to be less volatile. Overall, the sentiment is neutral, with a potential range of -2% to 2% over the next two weeks.
The earnings call presents a mixed picture: strong order intake (book-to-bill ratio at 1.08), positive shareholder returns, and a cultural shift towards customer-centricity are positives. However, flat revenue, declining margins, and unclear demand visibility beyond Q2 are concerns. The Q&A reveals management's cautious optimism but also highlights uncertainties, especially regarding tariffs and AI business potential. The market cap suggests moderate volatility, leading to a neutral prediction (-2% to 2%) for the stock price over the next two weeks.
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