onsemi (ON - Free Report) reported first-quarter 2022 non-GAAP earnings of $1.22 per share, outpacing the Zacks Consensus Estimate by 16.19%. The company had reported earnings of 35 cents per share in the year-ago quarter.
Revenues of $1.95 billion beat the Zacks Consensus Estimate by 1.99% and improved 31.3% on a year-over-year basis.
Shares closed at $55.62 on May 2, up 6.74% following the results. onsemi shares lost 18.1% year to date, outperforming the Zacks Computer & Technology sector’s rise of 21.1%.
Top-Line Details
Power Solutions Group or PSG revenues of $986.7 million (accounting for 50.7% of revenues) surged 32.1% year over year.
Advanced Solutions Group or ASG revenues of $689.3 million (35.4% of revenues) increased 29.7% on a year-over-year basis.
Intelligent Sensing Group or ISG revenues of $269 million (13.8% of revenues) improved 32.4% year over year.
In terms of end markets, Automotive (36.7% of revenues) revenues were $714.5 million, up 38.4% year over year. Industrial (27.9% of revenues) end-market (includes military, aerospace and medical) revenues increased 47.9% year over year to $543.2 million. Other (35.3% of revenues) end-market revenues grew 15% year over year to $687.3 million.
Operating Details
Non-GAAP gross margin was 49.4% compared with the year-ago quarter’s 35.2%.
Non-GAAP operating expenses declined 6.7% year over year to $302.8 million.
Non-GAAP operating margin was 33.9%, significantly up from the year-ago quarter’s figure of 13.3%, courtesy of a higher revenue base and improvement in gross margin.
Balance Sheet & Cash Flow
As of Apr 1, 2022, onsemi had cash and cash equivalents of $1.65 billion compared with $1.35 billion on Dec 31, 2021.
Total debt (including current portion), as of Apr 1, 2022, was $3.21 billion, down from $3.07 billion reported on Dec 31, 2021.
First-quarter 2022 cash flow from operations amounted to $478.6 million compared with the previous quarter’s reported figure of $626.6 million.
Free cash flow amounted to $304.8 million compared with $457 million in the previous quarter.
Guidance
For second-quarter 2022, onsemi expects revenues between $1.97 billion and $2.07 billion.
Non-GAAP gross margin is projected in the range of 48.5-50.5%.
Non-GAAP operating expenses are expected to be $305-$320 million.
Non-GAAP earnings are envisioned between $1.20 per share and $1.32 per share.
Zacks Rank & Stocks to Consider
onsemi currently has a Zacks Rank #3 (Hold).
Analog Devices (ADI - Free Report) , Angi (ANGI - Free Report) and Avaya Holdings are some better-ranked stocks that investors can consider from the broader sector. All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Analog Devices shares have outperformed the sector year-to-date, declining 10%. ADI is set to report second-quarter fiscal 2022 results on May 18.
Angi’s shares have underperformed the sector year to date, declining 49.7%.
ANGI is set to report first-quarter 2022 on May 10.
Avaya’ shares have underperformed sector year to date, declining 50.3%.
Avaya is set to report second-quarter fiscal 2022 results on May 10.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
onsemi (ON - Free Report) reported first-quarter 2022 non-GAAP earnings of $1.22 per share, outpacing the Zacks Consensus Estimate by 16.19%. The company had reported earnings of 35 cents per share in the year-ago quarter.
Revenues of $1.95 billion beat the Zacks Consensus Estimate by 1.99% and improved 31.3% on a year-over-year basis.
Shares closed at $55.62 on May 2, up 6.74% following the results. onsemi shares lost 18.1% year to date, outperforming the Zacks Computer & Technology sector’s rise of 21.1%.
Top-Line Details
Power Solutions Group or PSG revenues of $986.7 million (accounting for 50.7% of revenues) surged 32.1% year over year.
Advanced Solutions Group or ASG revenues of $689.3 million (35.4% of revenues) increased 29.7% on a year-over-year basis.
Intelligent Sensing Group or ISG revenues of $269 million (13.8% of revenues) improved 32.4% year over year.
In terms of end markets, Automotive (36.7% of revenues) revenues were $714.5 million, up 38.4% year over year. Industrial (27.9% of revenues) end-market (includes military, aerospace and medical) revenues increased 47.9% year over year to $543.2 million. Other (35.3% of revenues) end-market revenues grew 15% year over year to $687.3 million.
Operating Details
Non-GAAP gross margin was 49.4% compared with the year-ago quarter’s 35.2%.
Non-GAAP operating expenses declined 6.7% year over year to $302.8 million.
Non-GAAP operating margin was 33.9%, significantly up from the year-ago quarter’s figure of 13.3%, courtesy of a higher revenue base and improvement in gross margin.
Balance Sheet & Cash Flow
As of Apr 1, 2022, onsemi had cash and cash equivalents of $1.65 billion compared with $1.35 billion on Dec 31, 2021.
Total debt (including current portion), as of Apr 1, 2022, was $3.21 billion, down from $3.07 billion reported on Dec 31, 2021.
First-quarter 2022 cash flow from operations amounted to $478.6 million compared with the previous quarter’s reported figure of $626.6 million.
Free cash flow amounted to $304.8 million compared with $457 million in the previous quarter.
Guidance
For second-quarter 2022, onsemi expects revenues between $1.97 billion and $2.07 billion.
Non-GAAP gross margin is projected in the range of 48.5-50.5%.
Non-GAAP operating expenses are expected to be $305-$320 million.
Non-GAAP earnings are envisioned between $1.20 per share and $1.32 per share.
Zacks Rank & Stocks to Consider
onsemi currently has a Zacks Rank #3 (Hold).
Analog Devices (ADI - Free Report) , Angi (ANGI - Free Report) and Avaya Holdings are some better-ranked stocks that investors can consider from the broader sector. All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Analog Devices shares have outperformed the sector year-to-date, declining 10%. ADI is set to report second-quarter fiscal 2022 results on May 18.
Angi’s shares have underperformed the sector year to date, declining 49.7%.
ANGI is set to report first-quarter 2022 on May 10.
Avaya’ shares have underperformed sector year to date, declining 50.3%.
Avaya is set to report second-quarter fiscal 2022 results on May 10.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on ADI - FREE
Get the latest research report on ANGI - FREE
Get the latest research report on ON - FREE