Aggressive · Stocks to Consider and Updates

ON Semiconductor Beats Earnings; Full-Year 2019 Growth Slowing

Phoenix-based ON Semiconductor Corp. (NASDAQ: ON – $20.80) reported total revenue in the fourth quarter of 2018 was $1.503 billion, up approximately nine percent compared to the same quarter last year and in line with consensus. The company said that it had earned, on an adjusted basis, $0.53 per share compared to $0.39 a year ago and six cents ahead of Street expectations. ON delivered strong performance in the period despite slowdown in macroeconomic conditions. Key secular trends driving growth were in automotive, industrial and cloud-power end-markets. For the full-year, ON Semi reported earnings of $1.96 vs. $1.90 for all of 2017.

       Considering booking trends and backlog levels, the company anticipates that total revenue in first quarter of 2019 will be about $1.365 to $1.415 billion. Wall Street analysts have adjusted earnings per share pegged at $0.41 and full-year EPS between $1.85 and $2.00. The shares, in my view, are reasonably valued at about ten times anticipated 2019 earnings. While growth may slow somewhat this year, aggressive investors with a long-term outlook may want to take a look at ON Semi as it continues to build on its portfolio across multiple end-markets.

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