Why Is Vishay (VSH) Down 7.1% Since Last Earnings Report?

A month has gone by since the last earnings report for Vishay Intertechnology (VSH). Shares have lost about 7.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Vishay due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Vishay Intertechnology, Inc. before we dive into how investors and analysts have reacted as of late.

Vishay Intertechnology reported second-quarter 2026 earnings of 19 cents per share, beating the Zacks Consensus Estimate by 26.7%. Earnings jumped 19-fold from the year-ago quarter's earnings of a penny, aided by higher volumes, improved pricing and stronger operating leverage.

Revenues rose 16.6% year over year to $888.6 million but missed the consensus mark by 0.5%. Adjusted revenues were $918.6 million. Book-to-bill reached 1.32, while backlog stood at 6.1 months.

Adjusted revenues increased 9.5% sequentially and 20.5% year over year. Volume rose 7% from the prior quarter and 18% from a year earlier, while average selling prices improved 2% in both comparisons. Favorable currency movements added 1% to year-over-year growth.

Management cited stronger demand across product technologies, end markets, channels and regions. Customers also provided longer order visibility as lead times stretched and supply assurance concerns increased. Total backlog rose 18% to $1.9 billion.

Industrial revenues climbed 16.2% sequentially and 30.1% year over year, accounting for more than half of the quarter's revenue increase. Demand was supported by smart grid, artificial intelligence power, high-voltage direct-current projects and factory automation.

Automotive revenues advanced 3.6% from the prior quarter and 10.1% from the year-ago period. Aerospace and defense sales increased 4.2% sequentially and 15.4% year over year, while healthcare revenues grew 7% and 14.7%, respectively. Other end-market revenues rose 11.3% sequentially and 28.4% year over year.

Distribution revenues jumped 15.6% sequentially and 24.2% year over year, lifting the channel's share of total revenues to 58% from 55% in the first quarter. Point-of-sale activity rose 4.7% sequentially and 20.5% year over year, while distributor inventory declined to 18 weeks from 20 weeks.

OEM revenues improved 1.7% from the prior quarter and 16.8% from a year earlier. EMS revenues increased 3.2% sequentially and 10.8% year over year, reflecting program ramp-ups in industrial, aerospace and defense, automotive and AI applications.

Resistors remained the largest segment, with revenues of $215 million, up from $203.7 million in the first quarter and $194.8 million a year earlier. MOSFET revenues were $188.9 million, while Diodes generated $187 million. Optoelectronic Components contributed $70.1 million.

Capacitor revenues reached $153.4 million, and Inductors produced $104.2 million. Inductors posted the highest gross margin at 31.1%. Book-to-bill was strongest in Resistors at 1.43, followed by Inductors at 1.42.

Gross profit rose to $207.4 million from $148.7 million a year ago. GAAP gross margin expanded 380 basis points to 23.3%, while adjusted gross margin was 22.6%. Higher volumes and improved pricing helped offset metals, materials and logistics cost pressures.

Selling, G&A expenses increased to $153.9 million from $126.6 million. Operating margin improved to 6% from 2.9%, while adjusted operating margin reached 5.8%. Adjusted EBITDA margin increased to 11.4% from 8.3% in the prior-year quarter.

Operating cash flow was $105.4 million compared with an outflow of $8.8 million a year earlier. Capital expenditures totaled $95.2 million, including about $66 million for the new 12-inch wafer fab in Germany. Free cash flow was $10.3 million versus negative $73.2 million.

Cash and cash equivalents totaled $1.30 billion at quarter-end. Inventories increased to $807.1 million as the company built safety stock and supported higher backlog. Vishay also completed a public stock offering that generated $830 million in net proceeds.

For the third quarter of 2026, Vishay expects revenues between $945 million and $975 million. At the midpoint, the outlook implies growth of 4.5% sequentially and 21.4% year over year.

Gross margin is projected at 24%, plus or minus 50 basis points. SG&A expenses are expected at $155 million, plus or minus $3 million, while interest expense is forecast at about $7 million. The company maintained its 2026 capital spending plan of $400 million to $440 million.

Since the earnings release, investors have witnessed a upward trend in estimates review.

The consensus estimate has shifted 20.61% due to these changes.

At this time, Vishay has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock has a score of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Vishay has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).