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

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On Semiconductor (ON - Free Report) is slated to release its third-quarter 2023 results on Oct 30.

For third-quarter 2023, onsemi expects revenues between $2.095 billion and $2.195 billion. Earnings are expected in the range of $1.27-$1.41 per share.

The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.35 per share, unchanged in the past 30 days, indicating a decline of 6.90% from the figure reported in the year-ago quarter.

The consensus mark for revenues is pegged at $2.15 billion, suggesting a deterioration of 2.10% from the year-ago quarter’s reported figure.

ON Semiconductor Corporation Price and EPS Surprise

 

ON Semiconductor Corporation Price and EPS Surprise

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

 

onsemi’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 8.66%.

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

Factors to Note

onsemi’s third-quarter performance is likely to have benefited from the increased adoption of its products in automotive and industrial end markets.

Our model estimate for third-quarter 2023 automotive segment revenues is pegged at $100.6 million, indicating a 15.2% year-over-year growth.

In the to-be-reported quarter, onsemi expects substantial top-line growth, with revenue from eight-megapixel image sensors more than doubling year-over-year, driven by the innovative Hyperlux Family sensors for automotive and industrial applications.

It is winning market share in the automotive segment thanks to its silicon carbide dominance and intelligent power and sensing solution.

Our model estimate for third-quarter 2023 intelligent sensing group revenues is pegged at $353.9 million, indicating a 3.4% year-over-year growth.

onsemi's EliteSIC silicon carbide modules increase the efficiency and lower the weight of the traction inverters, extending electric vehicle range and improving performance. These factors are likely to have driven its third-quarter top line.

In this regard, an expanding clientele with the likes of Volkswagen, Tesla, Mercedes Benz, Jaguar Land Rover, BMW AG, ZEEKR and Hyundai Motor Group are expected to have driven the demand for silicon carbide and benefited top-line growth.

However, onsemi’s third-quarter top line is expected to have been affected by stiff competition and persistent weakness in non-strategic end markets. Also, lower factory utilization, negative impact of EFK fab acquisition and slow wafer starts are expected to have hurt margin performance in the to-be-reported 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. That is exactly the case here.

onsemi has an Earnings ESP of +1.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

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

GoDaddy (GDDY - Free Report) has an Earnings ESP of +8.11% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

GoDaddy shares have declined 3.1% year to date. GDDY is set to report its third-quarter 2023 results on Nov 2.

Fastly (FSLY - Free Report) has an Earnings ESP of +17.24% and a Zacks Rank #2 , at present.

Fastly shares have gained 72.8% year to date. FSLY is set to report its third-quarter 2023 results on Nov 1.

Bill Holdings (BILL - Free Report) has an Earnings ESP of +4.42% and a Zacks Rank #3, at present

Bill Holdings shares have declined 17.2% year to date. BILL is set to report its first-quarter fiscal 2024 results on Nov 2.

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

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