Shares of ON Semiconductor (NASDAQ: ON), a chipmaker focused on power and sensing technologies for the auto and industrial markets, surged 11.5% on Monday.
The catalyst for the gain was the company’s release of a better-than-expected second-quarter report. Revenue and earnings both beat Wall Street’s estimates.
Image source: Getty Images.
ON Semiconductor’s key numbers
Metric
Q2 2023
Q2 2024
Change
Revenue
$2.094 billion
$1.735 billion
(17%)
GAAP net income
$576.6 million
$338.2 million
(41%)
Adjusted net income
$583.3 million
$412.1 million
(29%)
GAAP earnings per share (EPS)
$1.29
$0.78
(40%)
Adjusted EPS
$1.33
$0.96
(28%)
Data source: On Semiconductor. GAAP = generally accepted accounting principles.
Investors should focus on the adjusted numbers because they exclude one-time items.
Wall Street was looking for adjusted EPS of $0.92 on revenue of $1.73 billion, so Onsemi, as the company is commonly known, edged by the top-line expectation and also exceeded the profit estimate. Its revenue met its own guidance, which was for $1.68 billion to $1.78 billion, and its adjusted EPS came in at the high end of its guidance range, which was $0.86 to $0.98.
Onsemi used $590.9 million in cash running its operations during the quarter, compared with using $383.5 million in the year-ago period. The company ended the quarter with cash, cash equivalents, and short-term investments of $2.68 billion and long-term debt of $2.55 billion.
ON Semiconductor’s revenue breakdown
Segment
Q2 2024 Revenue
Change (YOY)
Power supply group (PSG)
$835.2 million
(15%)
Analog & mixed-signal group (AMG)
$647.8 million
(18%)
Intelligent sensing group (ISG)
$252.2 million
(22%)
Total
$1.735 billion
(17%)
Data source: ON Semiconductor. YOY = year over year.
Like many chipmakers (at least those not focused on artificial intelligence chips, such as Nvidia), Onsemi has been struggling to grow revenue recently due to the slowdown in its end markets, namely automotive and industrial companies. Electric vehicle (EV) sales appear to be in the early stages of rebounding, and overall auto sales should pick up if the Federal Reserve starts cutting…
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