Chipmaker Onsemi on Monday smashed Wall Street's targets for the first quarter and guided higher for the current period. ON stock rose on the news.
The Phoenix-based company, previously known as ON Semiconductor, earned an adjusted $1.22 a share on sales of $1.945 billion in the March quarter. Analysts polled by FactSet expected Onsemi earnings of $1.05 a share on sales of $1.91 billion. On a year-over-year basis, Onsemi earnings soared 249% while sales climbed 31%.
The company's adjusted gross profit margin improved to 49.4% in the first quarter. It was 45.2% in the fourth quarter and 35.2% in the year-earlier period.
"Our focused strategy has delivered sustainable results in Onsemi's margin and growth profile with the automotive and industrial end-markets now representing 65% of our revenue," Chief Executive Hassane El-Khoury said in a news release.
ON Stock Jumps After Report
He added, "With a highly differentiated portfolio of intelligent power and sensing products, strong visibility driven by long-term supply agreements, and exposure to secular megatrends of vehicle electrification, ADAS (advanced driver-assistance systems), energy infrastructure, and factory automation, we are well positioned to sustain our momentum."
On the stock market today, ON stock jumped 6.7% to close at 55.62.
For the current quarter, Onsemi forecast adjusted earnings of $1.26 a share on sales of $2.015 billion. That's based on the midpoint of its guidance. Wall Street had predicted earnings of $1.05 a share on sales of $1.924 billion for the second quarter. In the year-earlier period, Onsemi earned 63 cents a share on sales of $1.67 billion.
ON Ranks Second In Group
Onsemi makes power control and sensing chips for automotive, industrial and other applications.
ON stock is tied for second place out of 45 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 92 out of 99. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
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