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onsemi (ON) to Report Q3 Earnings: What's in the Cards?

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onsemi (ON - Free Report) is slated to release third-quarter 2022 results on Oct 31.

For third-quarter 2022, onsemi expects revenues between $2.07 billion and $2.17 billion. Earnings are expected in the range of $1.25-$1.37 per share.

The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.31 per share, unchanged in the past 30 days. The figure indicates a surge of 50.57% from the year-ago quarter’s levels.

The consensus mark for revenues stands at $2.12 billion, suggesting an improvement of 21.44% from the year-ago quarter’s figure.

onsemi’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 14.02%.

Let’s see how things are shaping up prior to this announcement.

ON Semiconductor Corporation Price and EPS Surprise

 

ON Semiconductor Corporation Price and EPS Surprise

ON Semiconductor Corporation price-eps-surprise | ON Semiconductor Corporation Quote

 

Factors to Note

onsemi’s third-quarter performance is likely to have benefited from key megatrends such as electric vehicles (EV), advanced driver assistance systems (ADAS), energy infrastructure and factory automation, which have been experiencing rising demand.

Manufacturing efficiencies, reallocation of capacity to strategic and high-margin products to drive favorable mix shift, and continued elimination of price-to-value discrepancies may have driven higher margin performance in the to-be-reported quarter.

onsemi’s expanding portfolio of highly-differentiated intelligent power and sensing products has been attracting new customers. This is likely to have driven third-quarter top-line growth.

To drive its silicon carbide revenues, onsemi is rapidly expanding its capacity across new sites like Hudson, New Hampshire.

The expansion of the Hudson facility also is expected to have helped onsemi in fully controlling SiC manufacturing supply chain from sourcing silicon carbide powder and graphite raw material to delivering fully-packaged SiC devices.

However, onsemi’s third-quarter performance is expected to have been affected by global supply chain constraints. Also, the company’s investments in silicon carbide ramp are expected to have hurt the margin in the third quarter.

What Our Model Indicates

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here.

onsemi has a Zacks Rank #4 (Sell) and an Earnings ESP of -0.45%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

ZoomInfo Technologies (ZI - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

ZI’s shares have lost 28.8% in the year-to-date period compared with the Zacks Computer - Integrated Systems industry’s decline of 7.4%.

Tencent Music Entertainment Group (TME - Free Report) has an Earnings ESP of +4.76% and a Zacks Rank #2.

TME shares have lost 44.3% in the year-to-date period compared with the Zacks Internet - Content industry’s decline of 35.7%.

Upstart (UPST - Free Report) has an Earnings ESP of +114.71% and a Zacks Rank #3.

UPST shares have lost 84.3% in the year-to-date period compared with the Zacks Computers - IT Services industry’s decline of 34.2%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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