CEO El-Khoury highlighted ongoing investments to expand ON’s position across the power spectrum as demand for efficient energy solutions grows in the automotive, industrial, and AI sectors.
The company, which specializes in chips for power and sensors in automotive and industrial markets, posted adjusted Q3 earnings of $0.99 per share, narrowly surpassing analysts’ projections of $0.97.
Revenue hit $1.76 billion, slightly exceeding the $1.75 billion consensus.
Despite a stronger-than-expected quarter, ON’s Q4 guidance missed analyst expectations, with projected revenue between $1.71 billion and $1.81 billion and earnings ranging from $0.92 to $1.04 per share.
“As power demands continue to rise across our key markets, and the need for greater efficiency becomes paramount, we are investing to win across the entire power spectrum to ensure that onsemi is best positioned to gain share in automotive, industrial and AI data centers,” said CEO Hassane El-Khoury.
Retail sentiment on Stocktwits shifted to ‘extremely bullish’ (90/100) from a ‘bearish’ a day ago, making ON one of the top 10 trending tickers.
Growth in ON’s auto revenue segment, a focus area, is projected to accelerate from minimal growth this year to 11% by 2025, reaching $4.85 billion.
Last week, KeyBanc analyst John Vinh cut ON’s price target from $95 to $90 but retained an ‘Overweight’ rating, noting mixed demand trends in sectors such as consumer electronics, PCs, and auto.
However, KeyBanc sees potential for recovery in automotive semiconductors as inventories stabilize, with customers increasing orders for upcoming model launches.
ON shares faced possible additional pressure on Monday amid news that Volkswagen AG ($VWAGY) plans to close several factories, cut jobs, and reduce wages. ON has a partnership to supply silicon carbide microchips to Volkswagen for electric vehicles, announced in July.
Year-to-date, ON stock is down over 10% but was up nearly 2% as of 10:15 a.m. ET.
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