VPG Q2 Earnings Miss Expectations, Revenues Increase Y/Y

Vishay Precision Group VPG reported second-quarter fiscal 2026 adjusted earnings of 4 cents per share, which missed the Zacks Consensus Estimate of 19 cents. The bottom line declined from adjusted earnings of 21 cents per share reported in the year-ago quarter.

Quarterly revenues increased 11.7% year over year to $83.9 million. However, the top line missed the Zacks Earnings Estimate by 3.97%.

Revenue growth was primarily driven by strength across key end markets, though approximately $3 million of shipments were delayed due to the implementation of a new ERP system in its steel-related systems business. Those delayed orders remain in the backlog and are expected to ship by year-end.

VPG's Q2 Performance in Detail

Gross profit increased to $32.4 million from $30.6 million in the year-ago quarter. However, gross margin contracted 210 basis points to 38.6% due to unfavorable foreign exchange movements and product mix. Adjusted operating margin declined to 1.7% from 5.4% a year ago, while adjusted EBITDA was $5.5 million, representing a 6.5% margin.

Vishay Precision Group, Inc. Price, Consensus and EPS Surprise

Vishay Precision Group, Inc. price-consensus-eps-surprise-chart | Vishay Precision Group, Inc. Quote

Bookings totaled $95.5 million during the quarter, reflecting continued strength in semiconductor, data center, aerospace and defense markets. The company reported a book-to-bill ratio of 1.14, marking the seventh consecutive quarter at or above 1.0, while backlog expanded to $136 million, providing improved visibility for the second half of fiscal 2026. Business development orders reached $11.6 million, keeping the company on track toward its full-year target of $45 million.

The Sensors segment remained the strongest performer, with revenues rising 26% year over year to $33.4 million and bookings climbing to a record $48.1 million, resulting in a record book-to-bill ratio of 1.44. Demand was fueled by AI-related semiconductor test, data center and fiber-optic applications. During the quarter, VPG received a vendor nomination from its initial humanoid robotics customer and booked approximately $500,000 of humanoid-related orders while shipping $320,000.

Weighing Solutions revenues increased 3% year over year to $30.3 million, supported by transportation and general industrial demand, while Measurement Systems revenues grew 5% year over year to $20.2 million despite ERP-related shipment delays. Aerospace and defense demand remained solid.

VPG's Balance Sheet and Cash Flows

The company ended the quarter with cash and cash equivalents of $75.7 million compared with $87.4 million at the end of fiscal 2025. Long-term debt declined to $15.6 million in the second quarter from $20.6 million in the previous quarter as VPG repaid $5 million of debt during the quarter, reducing future interest expense. Total assets were $450.7 million.

VPG’s cash from operating activities improved to an inflow of $0.3 million from an outflow of $0.6 million in the previous quarter. Adjusted free cash outflow narrowed to $1.4 million from $3.7 million in the first quarter, reflecting improved cash generation.

VPG’s 2026 Outlook

Management expects fiscal 2026 organic revenue growth to exceed its long-term target range of 8-10%, supported by sustained demand across semiconductor equipment, fiber optics, aerospace and defense, and the anticipated production ramp of humanoid robotics in the second half of the year. The company also remains on track to deliver approximately $6 million of cost savings in fiscal 2026 as part of its three-year $20 million cost-reduction program.

Zacks Rank and Stocks to Consider

At present, VPG carries Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are Lumentum LITE, Applied Materials AMAT and Analog Devices ADI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Lumentum have surged 123% year to date. The Zacks Consensus Estimate for LITE’s fiscal 2026 earnings is pegged at $8.19 per share, up by 5 cents over the past 30 days, indicating an increase of 297.6% year over year.

Shares of Applied Materials have jumped 107.9% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 3 cents over the past 30 days, indicating a rise of 28.9% year over year.

Analog Devices shares have surged 39.2% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating an increase of 33.9% year over year.

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