2024

Billion

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<p class="has-drop-cap">onsemi (NASDAQ: ON) reported its <a aria-label="financial results for the second quarter of 2024 (opens in a new tab)" href="https://www.businesswire.com/news/home/20240729426386/en/onsemi-Announces-Second-Quarter-2024-Results" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">financial results for the second quarter of 2024</a>, showcasing a mixed performance. The company recorded revenue of $1,735.2 million, a decrease from $1,862.7 million in Q1 2024 and $2,094.4 million in Q2 2023. <br><br>Despite the year-over-year revenue decline, the company maintained robust gross margins, with GAAP and non-GAAP gross margins at 45.2% and 45.3%, respectively.</p>
<p>Operating margins also saw a dip, with GAAP operating margin at 22.4% and non-GAAP operating margin at 27.5%. This is a decline from the previous quarter’s figures of 28.2% (GAAP) and 29.0% (non-GAAP). <a href="https://tokenist.com/investing/how-to-value-a-stock/" rel="noopener noreferrer nofollow" class="deco-link">Earnings per share (EPS)</a> were reported at $0.78 (GAAP) and $0.96 (non-GAAP), which, while respectable, also marked a decrease from the previous quarter’s EPS of $1.04 (GAAP) and $1.08 (non-GAAP).</p>
<p>One of the highlights of the quarter was the significant increase in free cash flow, which rose by approximately $250 million year over year. The company returned around $650 million of free cash flow to shareholders through stock repurchases over the last twelve months, reflecting a strong commitment to shareholder value despite the challenging market conditions.</p>
<h3 id="onsemi-reports-q2-double-beat">onsemi Reports Q2 Double Beat</h3>
<p>Comparing the actual performance against market expectations, onsemi’s results were a mixed bag. Analysts had anticipated an EPS of $0.92 and revenue of $1.73 billion for the quarter. The company exceeded the revenue expectation slightly, reporting $1,735.2 million, and reported a non-GAAP EPS of $0.96.</p>
<p>Gross margins were in line with the company’s historical performance, but the decline in operating margins was more pronounced than anticipated. The GAAP operating margin of 22.4% was a significant drop from 32.2% in Q2 2023, indicating increased operational costs or reduced operational efficiency. Non-GAAP operating margin also saw a decline, from 32.8% in Q2 2023 to 27.5% in the current quarter.</p>
<p>Segment-wise, all business units reported declines in revenue both sequentially and year-over-year. The Power Solutions Group (PSG) saw a 4% sequential decline and a 15% year-over-year decline, while the Advanced Solutions Group (AMG) and Intelligent Sensing Group (ISG) also reported significant drops. These declines highlight the broader challenges faced by onsemi in maintaining its market position amidst evolving industry dynamics.</p>
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<h3 id="onsemi-guidance-for-q3-2024">onsemi Guidance for Q3 2024</h3>
<p>Looking ahead, onsemi provided guidance for the third quarter of 2024, projecting revenue between $1,700 million and $1,800 million. The company expects GAAP gross margins to range from 44.3% to 46.3%, with non-GAAP gross margins slightly higher at 44.4% to 46.4%. Operating expenses are anticipated to be between $329 million and $344 million on a GAAP basis, and $305 million to $320 million on a non-GAAP basis.</p>
<p>The company also provided EPS guidance, forecasting GAAP diluted EPS between $0.85 and $0.97, and non-GAAP diluted EPS between $0.91 and $1.03. This guidance reflects a cautious optimism, aiming to stabilize and potentially improve margins while managing operational costs effectively.<br><br>onsemi’s strategic focus remains on driving growth through market share gains, particularly in the automotive sector, as evidenced by its recent supply agreement with Volkswagen Group. The company continues to invest in strategic markets and expand its portfolio of analog and mixed-signal solutions, positioning itself to capitalize on future growth opportunities.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em></p>
<h3 id="br"><br></h3>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/onsemi-on-reports-q2-2024-0-96-eps-1-74-billion-in-revenue/">onsemi (ON) Reports Q2 2024: $0.96 EPS, $1.74 Billion in Revenue</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

onsemi (ON) Reports Q2 2024: $0.96 EPS, $1.74 Billion in Revenue

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