onsemi's (ON) Q1 Earnings Beat Estimates, Revenues Up Y/Y
onsemi ON reported first-quarter 2023 non-GAAP earnings of $1.19 per share, outpacing the Zacks Consensus Estimate by 2% but declining 2.5% year over year.
Revenues of $1.96 billion beat the Zacks Consensus Estimate by 2% and improved 0.8% on a year-over-year basis.
Top-Line Details
Power Solutions Group revenues of $1.01 billion (accounting for 51.7% of revenues) increased 2.6% year over year.
Advanced Solutions Group revenues of $592.7 million (30.2% of revenues) decreased 14% on a year-over-year basis.
Intelligent Sensing Group revenues of $354.2 million (18.1% of revenues) jumped 31.7% year over year.
ON Semiconductor Corporation Price, Consensus and EPS Surprise
ON Semiconductor Corporation price-consensus-eps-surprise-chart | ON Semiconductor Corporation Quote
In terms of end markets, Automotive (50.3% of revenues) revenues were $986 million, up 38% year over year.
Industrial (28.4% of revenues) end-market (including military, aerospace and medical) revenues increased 6.6% year over year to $556.2 million.
Other (21.3% of revenues) end-market revenues declined 39.3% year over year to $417.5 million.
Operating Details
Non-GAAP gross margin contracted 260 basis points (bps) year over year to 46.8%.
Non-GAAP operating expenses decreased 5.5% year over year to $286 million.
Non-GAAP operating margin was 32.2%, down 170 bps on a year-over-year basis to 32.2%.
Balance Sheet & Cash Flow
As of Mar 31, 2023, onsemi had cash and cash equivalents of $2.70 billion compared with $2.92 billion on Dec 31, 2022.
Total debt (including the current portion), as of Mar 31, 2023, was $3.46 billion, up from $3.19 billion reported on Dec 31, 2022.
First-quarter 2023 cash flow from operations amounted to $408.9 million compared with the previous quarter’s reported figure of $731.3 million.
Free cash flow amounted to $87.4 million compared with $389.3 million in the previous quarter.
Guidance
For the second quarter of 2023, onsemi expects revenues between $1.98 billion and $2.08 billion.
Non-GAAP gross margin is projected in the range of 45.5-47.5%.
Non-GAAP operating expenses are expected in the range of $297-$312 million.
Non-GAAP earnings are envisioned between $1.14 per share and $1.28 per share.
Zacks Rank & Stocks to Consider
onsemi currently has a Zacks Rank #3 (Hold).
The company’s shares have gained 15.4% year to date, outperforming the Zacks Computer & Technology sector’s increase of 20.2%.
Asure Software ASUR, Fortinet FTNT and Cambium Networks CMBM are some better-ranked stocks that investors can consider in the broader sector. Both Asure Software and Fortinet sport a Zacks Rank #1 (Strong Buy) while Cambium carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Asure shares have gained 42.8% year to date. ASUR is set to report its first-quarter 2023 results on May 8.
Fortinet shares have gained 29% year to date. FTNT is set to report its first-quarter 2023 results on May 4.
Cambium shares have declined 30.1% year to date. CMBM is set to report its first-quarter 2023 results on May 8.
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