Chipmaker ON Semiconductor, also known as Onsemi, on Monday beat Wall Street's targets for the third quarter but offered mixed guidance for the current period. ON stock fell on the news.
The Phoenix-based company earned an adjusted $1.45 a share on sales of $2.19 billion in the September quarter. Analysts polled by FactSet had expected earnings of $1.31 a share on sales of $2.12 billion. On a year-over-year basis, Onsemi earnings rose 67% while sales climbed 26%.
For the current quarter, Onsemi forecast adjusted earnings of $1.26 a share on sales of $2.075 billion. That's based on the midpoint of its outlook. Wall Street had been modeling earnings of $1.25 a share on sales of $2.09 billion in the fourth quarter.
On the stock market today, ON stock sank 9% to close at 61.43. It has been consolidating for the past 10 weeks with a buy point of 76.88, according to IBD MarketSmith charts.
Onsemi Is Tops Among Chipmakers
"Onsemi has delivered another quarter of record results stemming from continued growth in our focus markets of automotive and industrial," Chief Executive Hassane El-Khoury said in a press release.
He added, "We remain confident in our long-term outlook as we continue to win where semiconductor content growth is accelerating for vehicle electrification, energy infrastructure, advanced safety and factory automation."
Piper Sandler analyst Harsh Kumar reiterated his overweight, or buy, rating on ON stock but trimmed his price target to 75 from 90.
"ON continues to see strength in automotive, led by electrification and ADAS (advanced driver-assistance systems)," he said in a note to clients. "However, the company is starting to see weakness in its industrial end-market, along with further softening in its non-core markets."
Onsemi stock ranks first out of 32 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 94 out of 99.
ON Stock On IBD 50 List
Onsemi stock is on the IBD 50 list of top-performing growth stocks. Also, it is on IBD's Tech Leaders list.
Last week, semiconductor companies reporting September-quarter results broadly beat analyst estimates. But they split when it came to guidance.
Chipmakers posting beat-and-raise reports included Allegro MicroSystems, Impinj and MaxLinear. Chipmakers delivering beat-and-miss reports included Intel, Monolithic Power Systems, Silicon Labs, STMicroelectronics, Texas Instruments and Wolfspeed.
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