ON Semiconductor Reports Strong Q3 Earnings and Revenue, but Disappoints with Q4 Guidance

by Warren Seah

ON Semiconductor (ticker: ON) has reported better-than-expected earnings and revenue for the third quarter of this year. However, the company’s fourth-quarter guidance failed to meet expectations.

Impressive Third-Quarter Performance

In Q3, ON Semiconductor achieved earnings of $1.39 per share, with revenue totaling $2.18 billion. This exceeded the predictions of analysts surveyed by FactSet, who had expected earnings of $1.34 per share on revenue of $2.15 billion. It’s worth noting that in the same quarter last year, the company recorded earnings of $1.45 per share on revenue of $2.19 billion.

CEO Emphasizes Resilience in Challenging Market

Hassane El-Khoury, Chief Executive of ON Semiconductor, expressed satisfaction with the company’s performance amidst market softness. He described the third quarter as another solid one and attributed it to their disciplined approach and execution.

Disappointing Fourth-Quarter Guidance

While ON Semiconductor managed to deliver strong results in Q3, their fourth-quarter guidance fell short of expectations. The company anticipates earnings per share ranging from $1.13 to $1.27. This is below the FactSet consensus of $1.36. Similarly, their revenue estimates for Q4, projected to be between $1.95 billion and $2.05 billion, were also lower than analyst estimates of $2.18 billion.

Stock Performance

Following the announcement, shares of ON Semiconductor saw a decline of 5.9% in premarket trading on Monday, settling at $78.42. However, it is important to note that the stock has experienced significant growth throughout 2023, with a 34% increase year-to-date.

Factors Influencing Recent Performance

Despite the stock’s strong performance this year, it has recently faced challenges. These include tighter export restrictions to China and a broader sell-off in the tech sector, prompted by disappointing earnings reports from major companies.

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