onsemi ( ON Quick Quote ON - Free Report) reported second-quarter 2022 non-GAAP earnings of $1.34 per share, outpacing the Zacks Consensus Estimate by 6.35%. The company had reported earnings of 63 cents per share in the year-ago quarter. Revenues of $2.09 billion beat the Zacks Consensus Estimate by 3.4% and improved 7.2% on a year-over-year basis. Shares are down 6.48% in pre-market trading following the results. onsemi shares have lost 1.6% year to date, outperforming the Zacks Computer & Technology sector’s rise of 24%. Top-Line Details
Power Solutions Group or PSG revenues of $1.06 billion (accounting for 50.7% of revenues) increased 7.1% year over year.
Advanced Solutions Group or ASG revenues of $716.7 million (34.4% of revenues) increased 4% on a year-over-year basis.
Intelligent Sensing Group or ISG revenues of $311.3 million (14.9% of revenues) improved 15.7% year over year.
In terms of end markets, Automotive (37.6% of revenues) revenues were $784 million, up 41% year over year. Industrial (27.9% of revenues) end-market (includes military, aerospace and medical) revenues increased 34.3% year over year to $581.8 million. Other (34.5% of revenues) end-market revenues grew 5.6% year over year to $719.2 million. Operating Details
Non-GAAP gross margin was 49.4% compared with the year-ago quarter’s 32.9%.
Non-GAAP operating expenses increased 0.7% year over year to $317.9 million. Non-GAAP operating margin was 34.5%, significantly up from the year-ago quarter’s figure of 16.8%, courtesy of a higher revenue base and improvement in gross margin. Balance Sheet & Cash Flow
As of Jul 1, 2022, onsemi had cash and cash equivalents of $1.79 billion compared with $1.65 billion on Apr 1, 2022.
Total debt (including the current portion), as of Jul 1, 2022, was $3.21 billion, unchanged from the reported figure on Apr 1, 2022. Second-quarter 2022 cash flow from operations amounted to $420.8 million compared with the previous quarter’s reported figure of $478.6 million. Free cash flow amounted to $202.7 million compared with $304.8 million in the previous quarter. Guidance
For third-quarter 2022, onsemi expects revenues between $2.07 billion and $2.17 billion.
Non-GAAP gross margin is projected in the range of 48-50.5%. Non-GAAP operating expenses are expected to be $319-$334 million. Non-GAAP earnings are envisioned between $1.25 per share and $1.37 per share. Zacks Rank & Stocks to Consider
onsemi currently has a Zacks Rank #4 (Sell).
Asure Software ( ASUR Quick Quote ASUR - Free Report) , Aspen Technology ( AZPN Quick Quote AZPN - Free Report) , and Fastly ( FSLY Quick Quote FSLY - Free Report) are some better-ranked stocks that investors can consider in the broader sector. All three stocks have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Asure shares are down 27.2% year to date. ASUR is set to report second-quarter 2022 results on Aug 8. Aspen shares are up 34.1% year to date. AZPN is set to report fourth-quarter fiscal 2022 results on Aug 8. Fastly shares are down 67.9% year to date. FSLY is set to report second-quarter 2022 results on Aug 3.