Onsemi (ON) reported better-than-expected results in the third quarter. The semiconductor company’s adjusted earnings fell by 28.7% year-over-year to $0.99 per share but remained above analysts’ estimates of $0.97 per share.
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ON’s Revenues Dragged Down by Power Solutions Group
Additionally, the company’s revenues declined by 19.2% year-over-year to $1.76 billion in the third quarter but still surpassed consensus estimates of $1.75 billion. ON’s third-quarter revenues were impacted by its Power Solutions Group (PSG), which saw revenues drop by 23% year-over-year to $829.4 million. This segment comprised more than 45% of the company’s revenues in Q3.
The PSG Group offers a broad range of semiconductor products for power switching, conversion, signal conditioning, circuit protection, amplification, and voltage regulation.
ON Issues Q4 Outlook
Looking ahead, the company anticipates Q4 adjusted revenues in the range of $1.7 billion to $1.81 billion, with adjusted earnings likely to be between $0.92 and $1.04 per share. For reference, analysts are expecting adjusted earnings of $1 per share on revenues of $1.78 billion.
Is ON Semiconductor a Strong Buy?
Analysts remain cautiously optimistic about ON stock, with a Moderate Buy consensus rating based on 14 Buys, seven Holds, and one Sell. Over the past year, ON has increased by more than 6%, and the average ON price target of $87.33 implies an upside potential of 22.6% from current levels. These analyst ratings are likely to change following ON’s results today.
