Impressive Fourth Quarter Performance Drives ON Semiconductor Stock Impressive Fourth Quarter Performance Drives ON Semiconductor Stock

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By Ronald Tech

Shares of ON Semiconductor Corp (NASDAQ: ON) surged 8.5% to $76.86 as the company reported a remarkable fourth-quarter performance, outdoing market expectations. ON Semiconductor’s fourth-quarter FY23 revenue declined by 4.1% year-on-year to $2.02 billion, surpassing the consensus estimate of $2.00 billion.

The company’s adjusted earnings per share (EPS) of $1.25 also exceeded the consensus estimate of $1.21. Notably, the stock soared following the release of the quarterly results, reflecting investor confidence in the company’s financial prowess.

Revenue from the Power Solutions Group (PSG) witnessed a substantial 4% year-on-year growth, reaching $1.09 billion. In contrast, the Advanced Solutions Group (ASG) experienced an 11% year-on-year dip, totaling $624.6 million. Likewise, the Intelligent Sensing Group (ISG) registered a 13% year-on-year decline, amounting to $307.7 million.

Despite the revenue performance, the company’s gross margin decreased by 170 basis points to 46.7%, and the adjusted operating margin decreased by 250 basis points to 31.6%.

ON Semiconductor generated $220.7 million in free cash flow and held $2.48 billion in cash and equivalents, underlining the company’s robust cash position and financial stability.

Hassane El-Khoury, CEO of ON Semiconductor, hailed the company’s achievements, citing, “Our momentum continued this past year as we achieved record automotive revenue and 4x year-over-year growth in silicon carbide revenue. Looking ahead, we are driving innovation beyond silicon and silicon carbide with our upcoming analog and mixed signal platform to further our leadership in intelligent power and sensing solutions.”

In terms of the company’s outlook, ON Semiconductor expects first-quarter adjusted revenue in the range of $1.80 billion to $1.90 billion, falling short of the consensus estimate of $1.92 billion. The company’s projected adjusted EPS for the upcoming quarter is between $0.98 and $1.10, compared to the consensus of $1.10.

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The positive financial report led to a significant surge in ON Semiconductor stock, marking a trading high of $76.86 on Monday.