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ON Semiconductor Q3 Earnings Beat Estimates: Will Raised View Aid Shares?
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ON Semiconductor (ON - Free Report) reported third-quarter 2024 non-GAAP earnings of 99 cents per share, which outpaced the Zacks Consensus Estimate by 2.06% but declined 28.8% year over year.
Revenues of $1.76 billion beat the Zacks Consensus Estimate by 0.7% but declined 19.2% on a year-over-year basis.
The stock has gained 9% year to date compared with the Zacks Computer & Technology sector’s growth of 48.3%. We believe the raised guidance will help ON stock to recover.
ON Semiconductor Corporation Price, Consensus and EPS Surprise
Power Solutions Group revenues of $829.4 million (contributed 47.1% to revenues) fell 23% year over year. The figure missed the Zacks Consensus Estimate by 1.45%.
Analog & Mixed Group revenues of $653.7 million (37.1% of revenues) declined 15.7% on a year-over-year basis. The figure beat the consensus mark by 0.71%.
Intelligent Sensing Group revenues of $278.8 million (15.8% of revenues) fell 15.2% year over year. The figure beat the consensus mark by 7.46%.
In terms of end markets, Automotive (54% of revenues) revenues were $951.2 million, down 17.8% year over year. The figure beat the Zacks Consensus Estimate by 2.16%.
Industrial (25% of revenues) end-market (including military, aerospace and medical) revenues declined 28.6% year over year to $440 million. The figure missed the consensus mark by 5.39%.
Others (21% of revenues) end-market revenues declined 8.9% year over year to $371 million. The figure beat the consensus mark by 4.47%.
In the third quarter, ON Semiconductor introduced EliteSiC M3e MOSFETs, which significantly improve efficiency for power-hungry applications.
ON’s Operating Details
Non-GAAP gross margin contracted 180 basis points (bps) year over year to 45.5%.
Non-GAAP operating expenses decreased 5.5% year over year to $304.5 million.
Non-GAAP operating margin was 28.2%, down 440 bps on a year-over-year basis.
ON’s Balance Sheet & Cash Flow
As of Sept. 27, 2024, onsemi had cash and cash equivalents of $2.47 billion compared with $2.23 billion as of June 28, 2024.
Total debt (including the current portion), as of Sept. 27, 2024, was $3.34 billion, unchanged sequentially.
Third-quarter 2024 cash flow from operations amounted to $465.8 million compared with the previous quarter’s reported figure of $362.2 million.
Free cash flow amounted to $293.6 million compared with free cash flow of $207.7 million in the previous quarter.
ON Raises Q4 Guidance
For the fourth quarter of 2024, onsemi expects revenues between $1.71 billion and $1.81 billion.
Non-GAAP gross margin is projected to be in the range of 44-46%.
Non-GAAP operating expenses are expected to be in the range of $300-$315 million.
Non-GAAP earnings are envisioned between 92 cents per share and 1.04 cents.
Image: Bigstock
ON Semiconductor Q3 Earnings Beat Estimates: Will Raised View Aid Shares?
ON Semiconductor (ON - Free Report) reported third-quarter 2024 non-GAAP earnings of 99 cents per share, which outpaced the Zacks Consensus Estimate by 2.06% but declined 28.8% year over year.
Revenues of $1.76 billion beat the Zacks Consensus Estimate by 0.7% but declined 19.2% on a year-over-year basis.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The stock has gained 9% year to date compared with the Zacks Computer & Technology sector’s growth of 48.3%. We believe the raised guidance will help ON stock to recover.
ON Semiconductor Corporation Price, Consensus and EPS Surprise
ON Semiconductor Corporation price-consensus-eps-surprise-chart | ON Semiconductor Corporation Quote
ON’s Top-Line Details
Power Solutions Group revenues of $829.4 million (contributed 47.1% to revenues) fell 23% year over year. The figure missed the Zacks Consensus Estimate by 1.45%.
Analog & Mixed Group revenues of $653.7 million (37.1% of revenues) declined 15.7% on a year-over-year basis. The figure beat the consensus mark by 0.71%.
Intelligent Sensing Group revenues of $278.8 million (15.8% of revenues) fell 15.2% year over year. The figure beat the consensus mark by 7.46%.
In terms of end markets, Automotive (54% of revenues) revenues were $951.2 million, down 17.8% year over year. The figure beat the Zacks Consensus Estimate by 2.16%.
Industrial (25% of revenues) end-market (including military, aerospace and medical) revenues declined 28.6% year over year to $440 million. The figure missed the consensus mark by 5.39%.
Others (21% of revenues) end-market revenues declined 8.9% year over year to $371 million. The figure beat the consensus mark by 4.47%.
In the third quarter, ON Semiconductor introduced EliteSiC M3e MOSFETs, which significantly improve efficiency for power-hungry applications.
ON’s Operating Details
Non-GAAP gross margin contracted 180 basis points (bps) year over year to 45.5%.
Non-GAAP operating expenses decreased 5.5% year over year to $304.5 million.
Non-GAAP operating margin was 28.2%, down 440 bps on a year-over-year basis.
ON’s Balance Sheet & Cash Flow
As of Sept. 27, 2024, onsemi had cash and cash equivalents of $2.47 billion compared with $2.23 billion as of June 28, 2024.
Total debt (including the current portion), as of Sept. 27, 2024, was $3.34 billion, unchanged sequentially.
Third-quarter 2024 cash flow from operations amounted to $465.8 million compared with the previous quarter’s reported figure of $362.2 million.
Free cash flow amounted to $293.6 million compared with free cash flow of $207.7 million in the previous quarter.
ON Raises Q4 Guidance
For the fourth quarter of 2024, onsemi expects revenues between $1.71 billion and $1.81 billion.
Non-GAAP gross margin is projected to be in the range of 44-46%.
Non-GAAP operating expenses are expected to be in the range of $300-$315 million.
Non-GAAP earnings are envisioned between 92 cents per share and 1.04 cents.
ON’s Zacks Rank & Stocks to Consider
onsemi currently has a Zacks Rank #4 (Sell).
Reddit (RDDT - Free Report) , Garmin (GRMN - Free Report) and Cadence Design Systems (CDNS - Free Report) are some better-ranked stocks that investors can consider in the broader sector. Each stock currently carries Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Reddit shares have gained 54% year to date. RDDT is set to report its third-quarter 2024 results on Oct. 29.
Garmin shares have gained 25.7% year to date. GRMN is set to report its third-quarter 2024 results on Oct. 30.
Cadence Design Systems shares have lost 8.5% year to date. CDNS is set to report its third-quarter 2024 results on Oct. 28.