onsemi (ON - Free Report) reported fourth-quarter 2021 non-GAAP earnings of $1.09 per share, outpacing the Zacks Consensus Estimate by 15.96%. The company had reported earnings of 35 cents per share in the year-ago quarter.
Revenues of $1.85 billion beat the Zacks Consensus Estimate by 3.07% and improved 27.6% on a year-over-year basis. The top line benefited from an increase in supply, and favorable mix and pricing across all end-markets served.
onsemi’s fourth-quarter results were mainly driven by a strong demand environment, particularly for power and sensing products in automotive and industrial end markets.
Shares closed at $62.26 on Feb 7, up 8.43% following the results. onsemi shares returned 56.4% in the past year, outperforming the Zacks Computer & Technology sector’s rise of 1.3%.
Top-Line Details
Power Solutions Group or PSG revenues of $953.3 million (accounting for 51.6% of revenues) surged 33.1% year over year, courtesy of strength in automotive and industrial end markets.
Advanced Solutions Group or ASG revenues of $647.3 million (35.1% of revenues) increased 24% on a year-over-year basis, driven by robust automotive and computing end markets.
Intelligent Sensing Group or ISG revenues of $245.4 million (13.3% of revenues) improved 18% year over year, primarily driven by a strong automotive end market.
In terms of end markets, Automotive (34.7% of revenues) revenues were $641 million, up 30.2% year over year. Industrial (28.3% of revenues) end-market (includes military, aerospace and medical) revenues increased 42.2% year over year to $522 million. Other (37% of revenues) end-market revenues grew 16.4% year over year to $683 million.
Operating Details
Non-GAAP gross margin was 45.1% compared with the year-ago quarter’s 34.4%. The improvement was led by a favorable mix of higher-margin products, pricing and efficiency in manufacturing.
Non-GAAP operating expenses declined 3.6% year over year to $306.4 million.
Non-GAAP operating margin was 28.6%, significantly up from the year-ago quarter’s figure of 14.2%, courtesy of a higher revenue base and improvement in gross margin.
Balance Sheet & Cash Flow
As of Dec 31, 2021, onsemi had cash and cash equivalents of $1.35 billion compared with $1.39 billion on Oct 1, 2021.
Total debt (including current portion) as of Dec 31, 2021 was $3.07 billion, down from $3.11 billion reported on Oct 1, 2021.
Fourth-quarter 2021 cash flow from operations amounted to $626.6 million compared with the previous quarter’s reported figure of $448.9 million.
Capital expenditures for the quarter were $169.6 million, which equate to a capital intensity of 9%. onsemi is spending a major part of its capital expenditure toward enabling its 300-millimeter capability at the East Fishkill fab and the expansion of its silicon carbide capacity.
Free cash flow amounted to $457 million compared with $355.7 million in the previous quarter.
Guidance
For first-quarter 2022, onsemi expects revenues between $1.85 billion and $1.95 billion.
Non-GAAP gross margin is projected in the range of 45.5-47.5%.
Non-GAAP operating expenses are expected to be $298-$313 million.
Non-GAAP earnings are envisioned between 98 cents and $1.10 per share.
For 2022, onsemi expects gross margin in the range of 46.5-47.5%.
Zacks Rank & Other Stocks to Consider
onsemi currently has a Zacks Rank #2 (Buy).
Airbnb (ABNB - Free Report) , Mandiant and Analog Devices (ADI - Free Report) are some stocks that investors can consider from the broader sector. While both Airbnb and Mandiant sport a Zacks Rank #1 (Strong Buy), Analog Devices carries the same rank as onsemi. You can see the complete list of today’s Zacks #1 Rank stocks here.
Airbnb’s shares have underperformed the sector in the past year, declining 21.2%.
Airbnb is set to report fourth-quarter 2021 results on Feb 15.
Mandiant’s shares have underperformed the Zacks Computer & Technology sector in the past year, declining 29.8%.
MNDT is set to report fourth-quarter 2021 on Feb 8.
Analog Devices’ shares have outperformed the Zacks Computer & Technology sector in the past year, rising 5%.
ADI is set to report first-quarter fiscal 2022 results on Feb 16.
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onsemi (ON - Free Report) reported fourth-quarter 2021 non-GAAP earnings of $1.09 per share, outpacing the Zacks Consensus Estimate by 15.96%. The company had reported earnings of 35 cents per share in the year-ago quarter.
Revenues of $1.85 billion beat the Zacks Consensus Estimate by 3.07% and improved 27.6% on a year-over-year basis. The top line benefited from an increase in supply, and favorable mix and pricing across all end-markets served.
onsemi’s fourth-quarter results were mainly driven by a strong demand environment, particularly for power and sensing products in automotive and industrial end markets.
Shares closed at $62.26 on Feb 7, up 8.43% following the results. onsemi shares returned 56.4% in the past year, outperforming the Zacks Computer & Technology sector’s rise of 1.3%.
Top-Line Details
Power Solutions Group or PSG revenues of $953.3 million (accounting for 51.6% of revenues) surged 33.1% year over year, courtesy of strength in automotive and industrial end markets.
Advanced Solutions Group or ASG revenues of $647.3 million (35.1% of revenues) increased 24% on a year-over-year basis, driven by robust automotive and computing end markets.
Intelligent Sensing Group or ISG revenues of $245.4 million (13.3% of revenues) improved 18% year over year, primarily driven by a strong automotive end market.
In terms of end markets, Automotive (34.7% of revenues) revenues were $641 million, up 30.2% year over year. Industrial (28.3% of revenues) end-market (includes military, aerospace and medical) revenues increased 42.2% year over year to $522 million. Other (37% of revenues) end-market revenues grew 16.4% year over year to $683 million.
Operating Details
Non-GAAP gross margin was 45.1% compared with the year-ago quarter’s 34.4%. The improvement was led by a favorable mix of higher-margin products, pricing and efficiency in manufacturing.
Non-GAAP operating expenses declined 3.6% year over year to $306.4 million.
Non-GAAP operating margin was 28.6%, significantly up from the year-ago quarter’s figure of 14.2%, courtesy of a higher revenue base and improvement in gross margin.
Balance Sheet & Cash Flow
As of Dec 31, 2021, onsemi had cash and cash equivalents of $1.35 billion compared with $1.39 billion on Oct 1, 2021.
Total debt (including current portion) as of Dec 31, 2021 was $3.07 billion, down from $3.11 billion reported on Oct 1, 2021.
Fourth-quarter 2021 cash flow from operations amounted to $626.6 million compared with the previous quarter’s reported figure of $448.9 million.
Capital expenditures for the quarter were $169.6 million, which equate to a capital intensity of 9%. onsemi is spending a major part of its capital expenditure toward enabling its 300-millimeter capability at the East Fishkill fab and the expansion of its silicon carbide capacity.
Free cash flow amounted to $457 million compared with $355.7 million in the previous quarter.
Guidance
For first-quarter 2022, onsemi expects revenues between $1.85 billion and $1.95 billion.
Non-GAAP gross margin is projected in the range of 45.5-47.5%.
Non-GAAP operating expenses are expected to be $298-$313 million.
Non-GAAP earnings are envisioned between 98 cents and $1.10 per share.
For 2022, onsemi expects gross margin in the range of 46.5-47.5%.
Zacks Rank & Other Stocks to Consider
onsemi currently has a Zacks Rank #2 (Buy).
Airbnb (ABNB - Free Report) , Mandiant and Analog Devices (ADI - Free Report) are some stocks that investors can consider from the broader sector. While both Airbnb and Mandiant sport a Zacks Rank #1 (Strong Buy), Analog Devices carries the same rank as onsemi. You can see the complete list of today’s Zacks #1 Rank stocks here.
Airbnb’s shares have underperformed the sector in the past year, declining 21.2%.
Airbnb is set to report fourth-quarter 2021 results on Feb 15.
Mandiant’s shares have underperformed the Zacks Computer & Technology sector in the past year, declining 29.8%.
MNDT is set to report fourth-quarter 2021 on Feb 8.
Analog Devices’ shares have outperformed the Zacks Computer & Technology sector in the past year, rising 5%.
ADI is set to report first-quarter fiscal 2022 results on Feb 16.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
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