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ON Semiconductor Corporation Message Board

  • marty81274 marty81274 May 16, 2002 8:46 PM Flag

    GUIDANCE

    Is there anybody out there that has an idea what onnn will be trading at by aug 02.

    i say maybe back at 6.30$ by that time, let's hope

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    • Yeah, but I notice it worked.

    • Let me try this.
      I will try to answer to your question based on numbers, etc...
      Based on onnn presentation at SSB presentation , sale for this quarter will be about 278-280M . Taking into cost reduction effort , the Cost Of Revenue will be 200M ( it was 210M on the last quarter ) and the Gross Profit 78-80M.
      Substracting the R&R , S&GA and Interest Expense which is pretty constant compare to the last quarter , I arrive to a net loss of 26-27M . This give an earning of -15.5 cent/ share .Mind you I am not a wall street analyst and has no conflict of interest , haha !!!
      The turning point will be the third quarter where people will see onnn will be on the verge of break even.
      The stock droped from 6 to 3.4 in short period of time because of excessive negative comment from Standard&Poor when onnn had to issue 300M bond.
      What people don't realize is onnn profit margin increased dramatically due to agressive cost reduction , you can surf the web , compare onnn with fcs, msn or irf and you can see by yourself.onnn is the cheapest producer in its category !!!
      Also , the last few years , onnn VP of sale made a fundamental mistake by not going through distributor ( he prefer direct sale ), that precipitate the down fall of sale. This has been corrected and sale should pick up slowly.
      So to your question,... the reply is by the third quarter , when onnn prove that S&P is wrong by to be too excessive negative , the sentiment will be more positive and the price can move higher , hopefully to where you wished !!!
      Come back to the topic of profit margin, many cie facing death had cut their cost structure dramatically ( the sad side is layoff and many people losing their job ,family problem ,...), this set the stage for very lean and mean operation. Wait till 2003 when IT spending must be back ,also by 2004 and 2005 when Telecom spending must be back for the simpliest reason : the products they bought during the 1999 are too rusted to be reparable. This set stage for big increase in profit margin.
      Hang in there.

      • 2 Replies to duc993
      • Good post.

        Using some available information and doing some analysis.

        I also did this exercise some weeks ago and posted my comments. I sugested that ONNN have improved a lot but raised two other issues:

        1) Margin - I do not beleive they can be profitable unless they improve this further. (Something like 38-40% Gross Margin)

        2) Cashflow - this is still a weak point for ONNN and should also be taken into account. You need cash to grow!

        My guess is they will reach break even Q4 or Q1 next year. They could then be profitable 2003.
        BUT, THEY STILL HAVE A LONG WAY TO GO.

      • >>Also , the last few years , onnn VP of sale made a fundamental mistake by not going through distributor ( he prefer direct sale ), that precipitate the down fall of sale. This has been corrected and sale should pick up slowly.


        This isn't correct. He actually fired most of the direct sales folks in order to concentrate 100% on distribution. This was a disaster, which is why he got fired. The distributes couldn't care less if they sold ON parts or competitor parts. Direct sales people are being rehired, so yes, it is being rectified.

    • marty -- i think onnn will hit double digits by Q4 with a little market cooperation and no new government corruption.

      onnn will be a $20 stock, imo, but obviously i can't pinpoint the date :).

      buy at the bottom of the cycle (now) and sell when your price target is met, imo.

      FC

    • I can buy a spike up earbs should came in somewhat better then expected.

    • >> IS THERE ANYBODY OUT THERE THAT HAS AN IDEA WHAT ONNN WILL BE TRADING AT BY AUG 02. <<

      I don't know, but I bet it spikes upward when they announce that Zen-boy is leaving to "pursue other interests."

 
ONNN
12.550.00(0.00%)Mar 13 4:00 PMEDT