onsemi's (ON) Q3 Earnings Beat Estimates, Revenues Down Y/Y
onsemi ON reported third-quarter 2023 non-GAAP earnings of $1.39 per share, outpacing the Zacks Consensus Estimate by 3% but declining 4.1% year over year.
Revenues of $2.18 billion beat the Zacks Consensus Estimate by 1.9% but declined 0.5% on a year-over-year basis.
The company’s shares have gained 36% year to date, outperforming the Zacks Computer & Technology sector’s increase of 25.2%.
Top-Line Details
Power Solutions Group revenues of $1.23 billion (accounting for 56.4% of revenues) increased 10.2% year over year. The figure beat the Zacks Consensus Estimate by 11.55%.
ON Semiconductor Corporation Price
ON Semiconductor Corporation price | ON Semiconductor Corporation Quote
Advanced Solutions Group revenues of $621.6 million (28.5% of revenues) decreased 15.3% on a year-over-year basis. The figure lagged the consensus mark by 9.42%.
Intelligent Sensing Group revenues of $328.6 million (15.1% of revenues) fell 4% year over year. However, the figure missed the consensus mark by 7.14%.
In terms of end markets, Automotive (53.1% of revenues) revenues were $1.16 billion, up 32.5% year over year. The figure also beat the Zacks Consensus Estimate by 4.71%.
Industrial (28.2% of revenues) end-market (including military, aerospace and medical) revenues increased 0.4% year over year to $615.8 million. The figure lagged the consensus mark by 1.67%.
Other (18.7% of revenues) end-market revenues declined 42.3% year over year to $407.1 million. The figure lagged the consensus mark by 2.34%.
Operating Details
Non-GAAP gross margin contracted 200 basis points (bps) year over year to 47.3%.
Non-GAAP operating expenses increased 5.9% year over year to $322.2 million.
Non-GAAP operating margin was 32.6%, down 290 bps on a year-over-year basis.
Balance Sheet & Cash Flow
As of Sep 29, 2023, onsemi had cash and cash equivalents of $2.68 billion compared with $2.62 billion as of Jun 30, 2023.
Total debt (including the current portion), as of Sep 29, 2023, was $3.45 billion, unchanged sequentially.
Third-quarter 2023 cash flow from operations amounted to $566.6 million compared with the previous quarter’s reported figure of $390.8 million.
Free cash flow amounted to $133.6 million compared with free cash outflow of $39.8 million in the previous quarter.
Guidance
For the fourth quarter of 2023, onsemi expects revenues between $1.95 billion and $2.05 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 $300-$315 million.
Non-GAAP earnings are envisioned between $1.13 per share and $1.27 per share.
Zacks Rank & Stocks to Consider
onsemi currently has a Zacks Rank #3 (Hold).
eGain EGAN, GoDaddy GDDY and Itron ITRI are some better-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
eGain shares have declined 27.8% year to date. EGAN is set to report its first-quarter fiscal 2024 results on Nov 2.
GoDaddy shares have declined 10.9% year to date. GDDY is set to report its third-quarter 2023 results on Nov 2.
Itron shares have returned 17% year to date. ITRI is set to report its third-quarter 2023 results on Nov 2.
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