Chipmaker ON Semiconductor, better known as Onsemi, on Monday beat Wall Street's targets for the fourth quarter but guided below views for the current quarter. Still, ON stock rose after the report.
The Scottsdale, Ariz.-based company earned an adjusted $1.25 a share on sales of $2.02 billion in the December quarter. Analysts polled by FactSet had expected earnings of $1.20 a share on sales of $2 billion. On a year-over-year basis, Onsemi's earnings declined 5% while sales slid 4%.
With its fourth-quarter report, Onsemi now has posted four straight quarters of declining earnings on a year-over-year basis. Sales have decreased for two quarter in a row.
For the current quarter, Onsemi forecast adjusted earnings of $1.04 a share on sales of $1.85 billion. That's based on the midpoint of its guidance. Wall Street had been modeling earnings of $1.10 a share on sales of $1.92 billion for the first quarter. In the year-earlier period, Onsemi earned an adjusted $1.19 a share on sales of $1.96 billion.
ON Stock Rises After Q4 Report
On the stock market today, ON stock climbed 9.5% to close at 77.59.
Onsemi's first-quarter guidance was "better than feared," JPMorgan analyst Harlan Sur said in a client note.
Onsemi guided to sales down 8% quarter to quarter. The Street had been bracing for worse, given the double-digit percentage declines predicted by industry peers Texas Instruments and Microchip Technology, Sur said.
Onsemi makes power and sensor chips for the automotive and industrial markets. It is benefiting from megatrends such as vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure.
"Our momentum continued this past year as we achieved record automotive revenue and 4x year-over-year growth in silicon carbide revenue," Chief Executive Hassane El-Khoury said in a news release. "We continue to transform the business by building resilience into our model, enabling us to navigate uncertain market conditions and deliver more predictable and sustainable results."
ON Semiconductor ranks No. 14 out of 32 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup. ON stock has a subpar IBD Composite Rating of 39 out of 99.
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