Vishay reports profit drop

By Akweli Parker INQUIRER STAFF WRITER
Posted: August 03, 2005

Vishay Intertechnology Inc. of Malvern said yesterday that its second-quarter profit fell to $9.7 million, or 5 cents a share, from $41.1 million, or 22 cents a share, in the year-earlier period, because of lower sales and special expenses.

Second-quarter sales dropped to $581.6 million from $646.7 million in the 2004 quarter.

Gerald Paul, Vishay's president and chief executive officer, said in a conference call that the company expected third-quarter sales of $560 million to $580 million and profit to be flat or slightly lower than in the 2004 third quarter. It posted a $22.1 million profit on sales of $584.3 million then.

The company makes semiconductors and a variety of other electronic components. Throughout the semiconductor industry, which is cyclical, sales have been relatively flat this year compared with 2004, which the Semiconductor Industry Association considered a boom year.

Vishay said earnings for this year's second quarter were hurt by restructuring and severance costs of $9.4 million, by charges for purchased research and development of $9.2 million, by $3.8 million in expenses related to Vishay's purchase this year of Siliconix, and by $1.3 million in losses resulting from adjustments to existing purchase commitments.

Paul said the company was on track with an effort to reduce fixed costs by $50 million annually.

Felix Zandman, Vishay's chairman and founder, said the company also was pursuing opportunities to grow, such as the announcement this week that it intended to buy optical electronics firm CyOptics Israel Ltd.

"We're still very much interested" in more acquisitions, Zandman said. "We are looking to that diligently."

Contact staff writer Akweli Parker at 215-854-5986 or aparker@phillynews.com.

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