ON Semiconductor Beats on EPS But GAAP Results Lag

Seth Jayson, The Motley Fool
Updated

ON Semiconductor (NAS: ONNN) reported earnings on May 2. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 30 (Q1), ON Semiconductor met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted and GAAP earnings per share dropped significantly.


Margins shrank across the board.

Revenue details
ON Semiconductor reported revenue of $744.4 million. The 20 analysts polled by S&P Capital IQ looked for revenue of $742.9 million on the same basis. GAAP reported sales were 14% lower than the prior-year quarter's $870.6 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.12. The 21 earnings estimates compiled by S&P Capital IQ predicted $0.09 per share. GAAP EPS of $0.06 for Q1 were 67% lower than the prior-year quarter's $0.18 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 32.9%, 300 basis points worse than the prior-year quarter. Operating margin was 7.4%, 590 basis points worse than the prior-year quarter. Net margin was 3.8%, 570 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $777.7 million. On the bottom line, the average EPS estimate is $0.14.

Next year's average estimate for revenue is $3.21 billion. The average EPS estimate is $0.66.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 475 members out of 489 rating the stock outperform, and 14 members rating it underperform. Among 84 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 81 give ON Semiconductor a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ON Semiconductor is outperform, with an average price target of $10.86.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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