ON Semiconductor Q2 Earnings Beat, Retail Sentiment Hits One-Year High

Shares of semiconductor supplier ON Semiconductor Corp rose over 13% on Monday after the firm reported upbeat second-quarter earnings. The company reported revenue of $1.74 billion, compared to a Street estimate of $1.73 billion. Adjusted earnings per share came in at $0.96, compared to an estimate of $0.92.

Following the announcement, retail sentiment flipped into extremely bullish territory (95/100), hitting a one-year high supported by extremely high message volume. 

Although revenue and earnings beat analyst estimates, the metrics declined compared to the same quarter last year. Revenue fell over 17% year-over-year (YoY), while net income fell over 41% to $338.20 million. As pricing pressures continue, its operating margin fell to 22.40% during the quarter as compared to 32.20% in the same period a year ago.

ON Semiconductor said it returned nearly $650 million of free cash flow to shareholders through stock repurchases over the last twelve months.

The company recently signed a multi-year deal with Volkswagen Group to be the primary supplier of a complete power box solution as part of its next-generation traction inverter for its Scalable Systems Platform (SSP).

Hassane El-Khoury, president and CEO of ON Semiconductor, said the firm remains dedicated to driving growth through market share gains, doubling down on investments in strategic markets, and expanding the breadth of its portfolio of products with analog and mixed-signal solutions.

“As reflected by our recent supply agreement with Volkswagen Group, we also continue to strengthen our silicon carbide leadership position in automotive as we ramp production with leading global OEMs in Europe, North America and China,” he said.

The firm expects third-quarter revenue to be between $1.70 and $1.80 billion, compared to a Street estimate of $1.73 billion. Diluted EPS is expected to be between $0.85 and $0.97, compared to an estimate of $0.92.