Chipmaker Onsemi early Monday beat Wall Street's targets for the second quarter and guided higher for the current period. But ON stock fell after the report.
The Phoenix-based company earned an adjusted $1.34 a share on sales of $2.09 billion in the June quarter. Analysts polled by FactSet expected Onsemi earnings of $1.25 a share on sales of $2.01 billion. On a year-over-year basis, Onsemi earnings jumped 113% while sales climbed 25%.
For the current quarter, Onsemi forecast adjusted earnings of $1.31 a share on sales of $2.12 billion. That's based on the midpoint of its outlook. Wall Street had predicted Onsemi earnings of $1.22 a share on sales of $2.02 billion for the third quarter. In the year-earlier period, Onsemi earned 87 cents a share on sales of $1.74 billion.
One knock on the company's guidance is a possible dip in gross profit margin. It forecast a gross margin of 48% to 50% in the September quarter. The midpoint of 49% would be below the 49.7% it achieved in the June quarter. Analysts had been looking for a gross margin of 49.3% in the third quarter.
ON Stock Retreats After Recent Runup
On the stock market today, ON stock dropped 4.7% to close at 63.66. In July, it surged 32.7% to 66.78.
IBD analysis indicates that ON stock has formed a double-bottom base with a buy point of 67.29. That base is within a 30-week consolidation period with a buy point of 71.35, according to IBD MarketSmith charts.
The relative strength line for ON stock has been rising as it has outperformed the S&P 500.
"Our leadership in the accelerating megatrends of vehicle electrification, ADAS (advanced driver-assistance systems), energy infrastructure and factory automation have enabled us to extend long-term supply agreements and increase demand visibility," Chief Executive Hassane El-Khoury said in a news release.
He added, "While we are optimistic about our outlook, we remain sensitive to dynamic market conditions."
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
