THE SPARK: Before the market opened, Vishay reported net income of $31 million, or 19 cents per share, in the latest quarter, down 79 percent from $147.2 million, or 81 cents a share, a year earlier. Adjusted for one-time items, Vishay earned 15 cents per share in the last three months of last year, below the 18 cents expected by analysts polled by FactSet.
Revenue fell 20 percent to $551.4 million, lower than the $570.2 million predicted by analysts.
The company said that it expects "similar" revenue in the current quarter. Analysts were forecasting $563.5 million in revenue.
THE BIG PICTURE: Vishay, which is based in Malvern, Pa., makes semiconductors and components for electronic devices and equipment in a variety of customers, including industrial companies, autos, telecommunications, aerospace and consumer electronics. Vishay said orders have dropped, so the company and its distributors have inventory to clear out. The company said it expects orders have bottomed out, and a recovery is expected once customers use up their existing stockpiles.
THE ANALYSIS: Although Vishay ended the year on a weaker note, Shawn M. Harrison of Longbow Research said earnings should improve this year. He said the company has been aggressive in removing fixed costs. Earnings should pick up, he said, once demand begins to recover and distributors clear out old inventory.
SHARE ACTION: The stock fell $1.11, or 8.7 percent, to $11.69 in afternoon trading Tuesday. Before Tuesday, it had gained 42 percent in 2012, a rally Harrison attributed to more positive investor feelings about semiconductor companies. Over the past 52 weeks, the price has ranged from $7.94 to $19.36.
