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onsemi's (ON) Q2 Earnings Beat Estimates, Revenues Down Y/Y
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onsemi (ON - Free Report) reported second-quarter 2023 non-GAAP earnings of $1.33 per share, outpacing the Zacks Consensus Estimate by 10.83% but declining 0.7% year over year.
Revenues of $2.09 billion beat the Zacks Consensus Estimate by 3.7% but declined 0.5% on a year-over-year basis.
The company’s shares have gained 68.5% year to date, outperforming the Zacks Computer & Technology sector’s increase of 42.9%.
Top-Line Details
Power Solutions Group revenues of $1.12 billion (accounting for 53.5% of revenues) increased 5.9% year over year. The figure beat the Zacks Consensus Estimate by 9.77%.
Advanced Solutions Group revenues of $649.6 million (31% of revenues) decreased 9.4% on a year-over-year basis.
Intelligent Sensing Group revenues of $325 million (15.5% of revenues) climbed 4.5% year over year. However, the figure missed the consensus mark by 1.10%.
In terms of end markets, Automotive (50.7% of revenues) revenues were $1.06 billion, up 35.4% year over year. The figure also beat the Zacks Consensus Estimate by 5.79%.
Industrial (29.1% of revenues) end-market (including military, aerospace and medical) revenues increased 4.7% year over year to $609.3 million. The figure beat the consensus mark by 5.58%.
Other (20.2% of revenues) end-market revenues declined 41.2% year over year to $423.2 million. The figure lagged the consensus mark by 2.56%.
Operating Details
Non-GAAP gross margin contracted 230 basis points (bps) year over year to 47.4%.
Non-GAAP operating expenses decreased 3.8% year over year to $305.5 million.
Non-GAAP operating margin was 32.8%, down 170 bps on a year-over-year basis.
Balance Sheet & Cash Flow
As of Jun 30, 2023, onsemi had cash and cash equivalents of $2.62 billion compared with $2.70 billion as of Mar 31, 2023.
Total debt (including the current portion), as of Jun 30, 2023, was $3.45 billion, down from $3.46 billion reported on Mar 31, 2023.
Second-quarter 2023 cash flow from operations amounted to $390.8 million compared with the previous quarter’s reported figure of $408.9 million.
Free cash flow amounted to $731.3 million compared with $87.4 million in the previous quarter.
Guidance
For the third quarter of 2023, onsemi expects revenues between $2.095 billion and $2.195 billion.
Non-GAAP gross margin is projected in the range of 46-48%.
Non-GAAP operating expenses are expected in the range of $300-$315 million.
Non-GAAP earnings are envisioned between $1.27 per share and $1.41 per share.
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onsemi's (ON) Q2 Earnings Beat Estimates, Revenues Down Y/Y
onsemi (ON - Free Report) reported second-quarter 2023 non-GAAP earnings of $1.33 per share, outpacing the Zacks Consensus Estimate by 10.83% but declining 0.7% year over year.
Revenues of $2.09 billion beat the Zacks Consensus Estimate by 3.7% but declined 0.5% on a year-over-year basis.
The company’s shares have gained 68.5% year to date, outperforming the Zacks Computer & Technology sector’s increase of 42.9%.
Top-Line Details
Power Solutions Group revenues of $1.12 billion (accounting for 53.5% of revenues) increased 5.9% year over year. The figure beat the Zacks Consensus Estimate by 9.77%.
Advanced Solutions Group revenues of $649.6 million (31% of revenues) decreased 9.4% on a year-over-year basis.
ON Semiconductor Corporation Price
ON Semiconductor Corporation price | ON Semiconductor Corporation Quote
Intelligent Sensing Group revenues of $325 million (15.5% of revenues) climbed 4.5% year over year. However, the figure missed the consensus mark by 1.10%.
In terms of end markets, Automotive (50.7% of revenues) revenues were $1.06 billion, up 35.4% year over year. The figure also beat the Zacks Consensus Estimate by 5.79%.
Industrial (29.1% of revenues) end-market (including military, aerospace and medical) revenues increased 4.7% year over year to $609.3 million. The figure beat the consensus mark by 5.58%.
Other (20.2% of revenues) end-market revenues declined 41.2% year over year to $423.2 million. The figure lagged the consensus mark by 2.56%.
Operating Details
Non-GAAP gross margin contracted 230 basis points (bps) year over year to 47.4%.
Non-GAAP operating expenses decreased 3.8% year over year to $305.5 million.
Non-GAAP operating margin was 32.8%, down 170 bps on a year-over-year basis.
Balance Sheet & Cash Flow
As of Jun 30, 2023, onsemi had cash and cash equivalents of $2.62 billion compared with $2.70 billion as of Mar 31, 2023.
Total debt (including the current portion), as of Jun 30, 2023, was $3.45 billion, down from $3.46 billion reported on Mar 31, 2023.
Second-quarter 2023 cash flow from operations amounted to $390.8 million compared with the previous quarter’s reported figure of $408.9 million.
Free cash flow amounted to $731.3 million compared with $87.4 million in the previous quarter.
Guidance
For the third quarter of 2023, onsemi expects revenues between $2.095 billion and $2.195 billion.
Non-GAAP gross margin is projected in the range of 46-48%.
Non-GAAP operating expenses are expected in the range of $300-$315 million.
Non-GAAP earnings are envisioned between $1.27 per share and $1.41 per share.
Zacks Rank & Stocks to Consider
onsemi currently has a Zacks Rank #3 (Hold).
Itron (ITRI - Free Report) , Super Micro Computer (SMCI - Free Report) and Vertiv (VRT - Free Report) are some better-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Itron shares have gained 51.1% year to date. ITRI is set to report its second-quarter 2023 results on Aug 3.
Super Micro shares have surged 307.4% year to date. SMCI is set to report its fourth-quarter fiscal 2023 results on Aug 8.
Vertiv shares have gained 90.3% in the year-to-date period. VRT is set to report its second-quarter 2023 results on Aug 2.