Aggressive

ON Semi Beats Earnings’ Views; Outlook Remains Soft

Phoenix-based ON Semiconductor Corp. (NASDAQ: ON – $22.44) reported revenue in the first quarter of $1.39 billion, up about one percent compared the first quarter of 2018 and in line with consensus. Adjusted earnings per share was $0.43 vs. $0.40 last year and three cents ahead of Street estimates. The company delivered relatively strong results despite soft business conditions as they are facing near-term headwinds and slowing product demand. The company’s key secular drivers, however, remain intact according to management and ON is well positioned to benefit from increasing semiconductor content in automotive, industrial and cloud-power applications. For the second quarter, ON anticipates revenue to be approximately $1.36 billion to $1.41 billion, below Wall Street’s views of $1.43 billion. Per share earnings for the second period – based on analyst’s estimates – should come in at $0.44 per share, about even with last year’s figure.  

       Shares of ON represent an interesting long-term investment option. Despite the presence of the aforementioned headwinds that are likely to hurt performance in the coming year, the company’s highly differentiated power management products keep it in position to take advantage of the broadening developments in automotive solutions and the Internet-of-Things. The company continues to build content across multiple end-market sectors and can be considered a potential investment candidate for speculative accounts with a 3- to 5-year horizon.

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