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onsemi (ON) Q2 Earnings Beat Estimates, Revenues Down Y/Y

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onsemi (ON - Free Report) reported second-quarter 2024 non-GAAP earnings of 96 cents per share, outpacing the Zacks Consensus Estimate by 4.35% but declining 27.8% year over year.

Revenues of $1.73 billion beat the Zacks Consensus Estimate by 0.2% but declined 17.2% on a year-over-year basis.

Top-Line Details

Power Solutions Group revenues of $835.2 million (contributing 48.1% to revenues) fell 14.5% year over year. The figure beat the Zacks Consensus Estimate by 2%.

Analog & Mixed Group revenues of $647.8 million (37.3% of revenues) declined 18.2% on a year-over-year basis. The figure beat the consensus mark by 0.70%.

ON Semiconductor Corporation Price, Consensus and EPS Surprise

 

ON Semiconductor Corporation Price, Consensus and EPS Surprise

ON Semiconductor Corporation price-consensus-eps-surprise-chart | ON Semiconductor Corporation Quote

 

Intelligent Sensing Group revenues of $252.2 million (14.5% of revenues) fell 22.4% year over year. The figure missed the consensus mark by 6.03%.

In terms of end markets, Automotive (52.3% of revenues) revenues were $906.9 million, down 14.6% year over year. The figure also missed the Zacks Consensus Estimate by 4.93%.

Industrial (27% of revenues) end-market (including military, aerospace and medical) revenues declined 23.2% year over year to $468 million. The figure beat the consensus mark by 5.99%.

Others (20.8% of revenues) end-market revenues declined 14.9% year over year to $360.3 million. The figure beat the consensus mark by 7.65%.

Operating Details

Non-GAAP gross margin contracted 210 basis points (bps) year over year to 45.3%. 

Non-GAAP operating expenses increased 0.9% year over year to $308.4 million.

Non-GAAP operating margin was 27.5%, down 530 bps on a year-over-year basis.

Balance Sheet & Cash Flow

As of Jun 28, 2024, onsemi had cash and cash equivalents of $2.23 billion compared with $2.61 billion as of Mar 29, 2024. 

Total debt (including the current portion), as of Jun 28, 2024, was $3.34 billion, unchanged sequentially.

Second-quarter 2024 cash flow from operations amounted to $362.2 million compared with the previous quarter’s reported figure of $498.7 million.

Free cash flow amounted to $207.7 million compared with free cash flow of $276.3 million in the previous quarter.

Guidance

For the third quarter of 2024, onsemi expects revenues between $1.7 billion and $1.8 billion.

Non-GAAP gross margin is projected in the range of 44.4-46.4%. 

Non-GAAP operating expenses are expected in the range of $305-$320 million.

Non-GAAP earnings are envisioned between 91 cents per share and 1.03 cents.

Zacks Rank & Stocks to Consider

onsemi currently has a Zacks Rank #3 (Hold).

The stock has declined 16% year to date against the Zacks Computer & Technology sector’s increase of 18.3%.

Arista Networks (ANET - Free Report) , Apple (AAPL - Free Report) and Cognizant Technology Solutions (CTSH - Free Report) are some better-ranked stocks that investors can consider in the broader sector. Arista Network sports a Zacks Rank #1 (Strong Buy) at present, while Apple and Cognizant Technology Solutions carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks’ shares have gained 35.6% year to date. ANET is set to report second-quarter 2024 results on Jul 30.

Apple’s shares have increased 13.2% year to date. AAPL is set to report third-quarter fiscal 2024 results on Aug 1.

Cognizant Technology Solutions’ shares have moved down 1.2% year to date. CTSH is set to report second-quarter 2024 results on Jul 31.

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