Chipmaker Onsemi on Monday beat Wall Street's targets for the fourth quarter but guided lower for the current period. ON stock dipped on the news.
The Phoenix-based company, also known as ON Semiconductor, earned an adjusted $1.32 a share on sales of $2.1 billion in the December quarter. Analysts polled by FactSet had expected earnings of $1.26 a share on sales of $2.08 billion. On a year-over-year basis, Onsemi earnings rose 21% while sales climbed 14%.
For the current quarter, Onsemi predicted earnings of an adjusted $1.08 a share on sales of $1.92 billion. That's based on the midpoint of its guidance. Wall Street had forecast earnings of $1.14 a share on sales of $2 billion for the first quarter.
The company also announced a new $3 billion stock buyback plan.
ON Stock Seesaws After Report
The secular megatrends of electric vehicles, advanced driver-assistance systems, alternative energy and industrial automation drove Onsemi's revenue growth in the fourth quarter, Chief Executive Hassane El-Khoury said in a news release.
In morning trades on the stock market today, ON stock dropped as much as 4.2% before rebounding. At one point Monday, it was up 4.7% to an all-time high of 84.70. But it ended the day down 0.6% to 80.40.
On Feb. 1, ON stock broke out of a cup base with a buy point of 77.38, according to IBD MarketSmith charts. The buy zone extends to 81.25, based on IBD trading principles. However, if the breakout fails, the sell zone starts at 71.96.
ON stock ranks third out of 31 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 97 out of 99.
IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
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