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Why Is ON Semiconductor Corp. (ON) Up 7.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for ON Semiconductor Corp. (ON - Free Report) . Shares have added about 7.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ON Semiconductor Corp. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
onsemi’s Q1 Earnings & Revenues Top Estimates, Up Y/Y
onsemi 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 20.55% due to these changes.
VGM Scores
At this time, ON Semiconductor Corp. has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise ON Semiconductor Corp. has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
ON Semiconductor Corp. is part of the Zacks Semiconductor - Analog and Mixed industry. Over the past month, M/A-Com (MTSI - Free Report) , a stock from the same industry, has gained 3%. The company reported its results for the quarter ended March 2022 more than a month ago.
M/A-Com reported revenues of $165.15 million in the last reported quarter, representing a year-over-year change of +9.7%. EPS of $0.68 for the same period compares with $0.51 a year ago.
M/A-Com is expected to post earnings of $0.70 per share for the current quarter, representing a year-over-year change of +22.8%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for M/A-Com. Also, the stock has a VGM Score of D.
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Why Is ON Semiconductor Corp. (ON) Up 7.4% Since Last Earnings Report?
It has been about a month since the last earnings report for ON Semiconductor Corp. (ON - Free Report) . Shares have added about 7.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ON Semiconductor Corp. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
onsemi’s Q1 Earnings & Revenues Top Estimates, Up Y/Y
onsemi 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 20.55% due to these changes.
VGM Scores
At this time, ON Semiconductor Corp. has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise ON Semiconductor Corp. has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
ON Semiconductor Corp. is part of the Zacks Semiconductor - Analog and Mixed industry. Over the past month, M/A-Com (MTSI - Free Report) , a stock from the same industry, has gained 3%. The company reported its results for the quarter ended March 2022 more than a month ago.
M/A-Com reported revenues of $165.15 million in the last reported quarter, representing a year-over-year change of +9.7%. EPS of $0.68 for the same period compares with $0.51 a year ago.
M/A-Com is expected to post earnings of $0.70 per share for the current quarter, representing a year-over-year change of +22.8%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for M/A-Com. Also, the stock has a VGM Score of D.