ON Semiconductor's Shares Jumped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of energy management chip maker ON Semiconductor (NAS: ONNN) power-surged as much as 12.8% overnight on very heavy trading.

So what: Third-quarter sales jumped 50% year over year thanks to the audacious acquisition of Sanyo's semiconductor division, while earnings stayed roughly flat at $0.25 per share. These numbers were right in line with analyst estimates, but investors heaved a huge sigh of relief over the relatively limited impact of the flooding disaster in Thailand. The $60 million revenue hit is bad, but ON is rerouting orders to other factories and things could have been much worse.

Now what: The damaged Thai facilities come from Sanyo, so there's a bit of unfortunate timing for that deal. But Sanyo's market footprint helps ON compete more effectively with traditional rivals Fairchild Semiconductor (NYS: FCS) and STMicroelectronics (NYS: STM) , and perhaps to stave off relative newcomers in the power management game such as Cirrus Logic (NAS: CRUS) . In the long run, ON will be happy to have made this enormous acquisition.

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At the time this article was published Fool contributor Anders Bylund holds no position in any of the companies mentioned. The Motley Fool owns shares of Cirrus Logic. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.

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