Analog semiconductors producer Vishay Intertechnology (NYSE:VSH) reported a year-over-year revenue decrease of 7.7% to $854 million in Q3 FY2023, falling short of analysts' expectations. The company's guidance for Q4 2023 revenue also disappointed, with a projected figure of $790 million, a 5.9% shortfall from analysts' estimates of $840 million.
The company's non-GAAP profit per share also took a hit, dropping from $0.98 in Q3 FY2022 to $0.60 in Q3 FY2023. However, this figure outperformed analysts' predictions of $0.57 by reaching $0.60—a 6.2% beat.
Joel Smejkal, the President and CEO, attributed the revenue decrease to inventory adjustments by distribution and EMS customers in response to softened industrial market demand and contracting lead times. Despite the downturn, the company intentionally increased its inventory with distribution partners to expand their participation in the higher margin channel.
Vishay's free cash flow showed a positive trend, increasing by 53.1% from the previous quarter to $55.5 million. The company's Inventory Days Outstanding (DIO) stood at 95, which is 9 days above its five-year average, indicating higher inventory levels than usual.
Vishay's revenue growth over the last three years averaged 13.2% annually but declined from $925 million in Q3 FY2022 to $854 million in Q3 FY2023. This decline reflects the broader challenges faced by the semiconductor sector this quarter.
Despite a challenging quarter, Vishay Intertechnology maintains a strong financial position with a market capitalization of $3.19 billion, a cash balance of $1.17 billion, and positive free cash flow over the last 12 months. The company's stock is currently trading at $22.9 per share.
InvestingPro Insights
Despite the recent downturn, Vishay Intertechnology, according to InvestingPro data, maintains a solid financial position. The company's market capitalization stands at $3.12 billion. The P/E ratio, which measures the company's current share price relative to its per-share earnings, is at a low 7.62, indicating the stock could be undervalued relative to its earnings potential. Furthermore, the company's revenue in the last twelve months as of Q2 2023 was $3.54 billion, showing the company continues to generate substantial income.
Turning to InvestingPro Tips, there are two key points to consider. Firstly, Vishay holds more cash than debt on its balance sheet, which provides a buffer against any potential financial downturns. Secondly, the company has a track record of consistently increasing its earnings per share, a positive indicator of its profitability.
For those interested in more detailed insights, InvestingPro provides a comprehensive set of additional tips and real-time data.
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