Components supplier Vishay Intertechnology, Inc. earned $14.0 million, or 10 cents per diluted share, on sales of $609.6 million in the fourth quarter of 2019 ended December 31, compared with $102.4 million, or 69 cents per share for the same quarter in 2018.
For the 2019 fiscal year ended December 31, 2019, Vishay posted sales of $2.6 billion, down from $3.0 billion for 2018. Net earnings for the year ended December 31, 2019 were $163.9 million, or $1.13 per diluted share compared, to $345.8 million, or $2.24 per diluted share for the year ended December 31, 2018.
Vishay’s fourth-quarter results marked a continuation of the inventory woes that have plagued a number of component suppliers since last year. The inventory glut has forced suppliers to cut production and in some cases close manufacturing plants.
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Commenting on results for the year 2019, Dr. Gerald Paul, President and Chief Executive Officer stated, “After a prolonged upturn in the prior two years, 2019 has been a year of correction for Vishay and the electronic components industry. The reduction of inflated inventory levels in the supply chain led to drastically reduced manufacturing volumes, which negatively impacted Vishay’s profitability. A further burden has been temporary manufacturing inefficiencies due to the very rapid and substantial adaptation of capacities to the decreased demand."
Dr. Paul added, “The performance in the fourth quarter has been disappointing due to a lower than usual contributive margin caused by an unfavorable product mix and various negative singularities impacting variable cost; lower other income; and a higher than assumed tax rate for the year. During the fourth quarter inventories of Vishay’s products at distribution were reduced by a further $37 million. Based on lower order cancellations and an order uptick from distribution in all regions, we believe that the fourth quarter represented the low point of the inventory correction in the supply chain.”
“For the first quarter 2020 we expect a further inventory reduction in the supply chain and guide for revenues in the range of $605 to $645 million and gross margins of 24.0% plus/minus 70 basis points at the exchange rates of the fourth quarter 2019. The guidance excludes the impact from the rapidly evolving coronavirus crisis.”