CHESTERBROOK, PA — Vishay Precision Group Inc. (NYSE: VPG) reported a 92% decline in third-quarter profit despite stronger demand for precision components used in artificial intelligence infrastructure, semiconductor equipment and defense applications, as currency pressures and manufacturing costs weighed on earnings at the Chesterbrook-based technology manufacturer.
Net income attributable to shareholders fell to $600,000, or 4 cents per diluted share, for the fiscal quarter ended Oct. 3, 2026, from $7.9 million, or 59 cents per share, a year earlier.
Revenue totaled $85.1 million, while adjusted revenue, which excludes tariff refunds passed through to customers, reached $87.4 million, an increase of 9.6% from the prior-year period.
The $2.3 million in tariff refunds reduced reported revenue without affecting gross profit.
The results underscored a widening gap between demand for Vishay Precision’s specialized measurement and sensing products and its ability to convert higher sales into earnings.
Operating margin declined to 3.2% from 12.7% a year earlier, while adjusted operating margin narrowed to 4.9% from 6.9%.
Gross profit margin remained relatively stable at 40.2%, compared with 40.3% in the prior-year quarter. Adjusted gross margin declined to 39.3% from 40.5%.
Adjusted net income fell to $1.8 million, or 14 cents per diluted share, from $3.9 million, or 30 cents per share.
Adjusted earnings before interest, taxes, depreciation and amortization totaled $8.2 million, representing a 9.4% margin.
Vishay Precision attributed part of the earnings pressure to unfavorable foreign currency movements, which affected quarterly operating income by $3.4 million compared with the prior year.
A higher adjusted tax rate of 48%, reflecting changes in the geographic distribution of income, also reduced diluted earnings by approximately 3 cents per share.
Despite weaker profitability, customer orders continued to outpace shipments.
Third-quarter bookings exceeded $100 million, producing an adjusted consolidated book-to-bill ratio of 1.17, meaning the company received approximately $1.17 in new orders for every dollar of adjusted revenue.
It marked the eighth consecutive quarter in which the company’s consolidated book-to-bill ratio reached or exceeded 1.0.
All three operating segments recorded ratios of at least 1.0, indicating that incoming orders matched or exceeded sales across the business.
The strongest demand came from the Sensors division, where quarterly bookings reached a record $51.7 million, up 7.5% sequentially.
The segment’s book-to-bill ratio climbed to 1.35, supported by demand for precision resistors used in semiconductor manufacturing equipment, data centers and fiber-optic applications.
Aerospace and defense customers also contributed to order activity.
“Sensor bookings reached a record, driven by continued strength in AI-driven applications, including demand for our precision resistors in semiconductor equipment, data center and fiber-optic applications, as well as continued demand in aerospace and defense,” Chief Executive Officer Ziv Shoshani stated.
The company is also preparing for increased production associated with humanoid robotics, with its manufacturing schedule aligned to a customer’s revised production plans.
Sensors revenue rose 21.3% to $38.4 million from $31.6 million a year earlier and increased 14.8% from the second quarter.
Higher sales of precision resistors in the Test and Measurement market drove annual growth, while sequential gains also reflected stronger demand for strain gages.
The segment’s gross margin declined to 32.4% from 33.6% a year earlier because of unfavorable exchange rates and higher manufacturing costs, partially offset by increased sales volumes.
Sequentially, the margin improved from 31.5%, reflecting higher production volume.
Adjusted Sensors gross margin was 32.6%, excluding $100,000 in startup costs.
Performance was weaker in Weighing Solutions, where adjusted quarterly revenue declined 2.2% to $26.9 million from $27.5 million a year earlier.
Reported revenue was $24.6 million after the effect of tariff refunds.
Adjusted revenue fell 11.3% sequentially from $30.3 million, reflecting reduced demand across transportation, industrial weighing and general industrial applications.
The annual decline was primarily attributable to lower sales in the Industrial Weighing market.
Adjusted bookings remained steady at $28.6 million, producing a book-to-bill ratio of 1.06.
Weighing Solutions gross margin narrowed to 37.6% from 40.3% a year earlier, although it improved slightly from 37.3% in the second quarter.
Adjusted gross margin was 34.6%, excluding $100,000 in startup costs and calculated against adjusted revenue.
The annual margin decline reflected unfavorable product mix and reduced inventory, while lower sales volumes pressured sequential profitability.
Measurement Systems delivered stronger revenue and margin performance.
Quarterly sales increased 7.6% to $22.1 million from $20.6 million a year earlier and rose 9.7% from the second quarter.
Annual growth was driven primarily by higher revenue in the AMS market, while sequential improvement reflected increased sales in the Steel market.
Bookings increased 18.6% sequentially to $22.2 million, producing a book-to-bill ratio of 1.01.
The segment’s gross margin expanded to 56.5% from 50.5% a year earlier and 52.5% in the preceding quarter, supported by higher volumes and a more favorable product mix.
Across the company, adjusted revenue increased 4.1% sequentially, indicating improving sales momentum despite the year-over-year earnings decline.
Shoshani identified cost reductions and higher production volumes as priorities for improving profitability.
Vishay Precision remains on track to achieve approximately $6 million in targeted cost savings during fiscal 2026.
The company also generated $11.1 million in operating cash flow during the third quarter and spent $5.6 million on capital expenditures, resulting in adjusted free cash flow of $5.5 million.
For the first nine months of fiscal 2026, Vishay Precision reported a net loss attributable to shareholders of $1.5 million, or 11 cents per diluted share, compared with net income of $7.2 million, or 54 cents per share, during the comparable 2025 period.
The nine-month operating results included an $8.1 million unfavorable foreign currency impact compared with the prior year.
Adjusted nine-month net income declined to $3.3 million, or 25 cents per diluted share, from $7.4 million, or 56 cents per share.
Vishay Precision’s adjusted results exclude certain expenses and other items that remain included under generally accepted accounting principles.
Beginning in fiscal 2026, the company revised several non-GAAP measures to exclude share-based compensation, citing changes to its executive compensation structure and expanded equity incentive programs.
Prior-period adjusted figures were recast to conform to the revised methodology, allowing comparisons on the same basis.
For the fourth fiscal quarter, Vishay Precision projected revenue of $84 million to $91 million, assuming exchange rates remain constant with those of the third quarter.
The guidance excludes anticipated tariff refunds passed through to customers, which the company expects to have no effect on profit.
Management expects continued order activity and a growing backlog to support revenue momentum into 2027.
The outlook places greater emphasis on translating demand from AI infrastructure, industrial technology and defense customers into improved operating margins as cost-saving measures take effect and production volumes increase.
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