Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Vishay Precision (NYSE:VPG) and the best and worst performers in the electronic components industry.
Like many equipment and component manufacturers, electronic components companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include data centers and telecommunications, which can benefit companies whose optical and transceiver offerings fit those markets. But like the broader industrials sector, these companies are also at the whim of economic cycles. Consumer spending, for example, can greatly impact these companies’ volumes.
The 12 electronic components stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.5% while next quarter’s revenue guidance was 1.7% below.
Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
In light of this news, electronic components stocks have held steady with share prices up 3% on average since the latest earnings results.
Vishay Precision (NYSE:VPG)
Emerging from Vishay Intertechnology (NYSE:VSH) in 2010, Vishay Precision (NYSE:VPG) operates as a global provider of precision measurement and sensing technologies.Vishay Precision reported revenues of $77.36 million, down 14.8% year on year. This print fell short of analysts’ expectations by 2.8%. Overall, it was a softer quarter for the company with revenue guidance for next quarter missing analysts’ expectations.
Ziv Shoshani, Chief Executive Officer of VPG, commented, "Sales in the second quarter were 4.2% lower sequentially reflecting continued mixed trends across our markets. Our book-to-bill in the second quarter improved slightly to 0.95, reflecting orders of $73.5 million which declined slightly sequentially. Demand improved in some cyclical markets such as Steel and consumer, while orders were lower in portions of our Test & Measurement market, as well as in Avionics, Military & Space and our industrial markets, primarily due to project timing and continued cautious ordering by our distributor customers."
Vishay Precision delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 21.3% since reporting and currently trades at $24.74.
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Best Q2: Bel Fuse (NASDAQ:BELFA)
Founded by 26-year-old Elliot Bernstein during the electronics boom after WW2, Bel Fuse (NASDAQ:BELF.A) provides electronic systems and devices to the telecommunications, networking, transportation, and industrial sectors.Bel Fuse reported revenues of $133.2 million, down 21.1% year on year, outperforming analysts’ expectations by 2.3%. The business had a stunning quarter with an impressive beat of analysts’ earnings estimates.
The market seems happy with the results as the stock is up 34.3% since reporting. It currently trades at $110.25.
Weakest Q2: Allient (NASDAQ:ALNT)
Founded in 1962, Allient (NASDAQ:ALNT) develops and manufactures precision and specialty-controlled motion components and systems.Allient reported revenues of $136 million, down 7.3% year on year, falling short of analysts’ expectations by 2.6%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
As expected, the stock is down 19.9% since the results and currently trades at $19.09.
Advanced Energy (NASDAQ:AEIS)
Pioneering technologies for radio frequency power delivery, Advanced Energy (NASDAQ:AEIS) provides power supplies, thermal management systems, and measurement and control instruments for various manufacturing processes.Advanced Energy reported revenues of $364.9 million, down 12.2% year on year. This print surpassed analysts’ expectations by 4.1%. It was a very strong quarter as it also logged an impressive beat of analysts’ operating margin and earnings estimates.
The stock is up 1.4% since reporting and currently trades at $109.87.
Belden (NYSE:BDC)
With its enamel-coated copper wire used in WWI for the Allied forces, Belden (NYSE:BDC) designs, manufactures, and sells electronic components to various industries.Belden reported revenues of $604.3 million, down 12.7% year on year. This result topped analysts’ expectations by 5.3%. It was an exceptional quarter as it also recorded an impressive beat of analysts’ operating margin estimates.
Belden delivered the biggest analyst estimates beat among its peers. The stock is up 32% since reporting and currently trades at $122.19.
This content was originally published on Stock Story
