Onsemi Surpasses Expectations Amidst Industry Challenges
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In a significant development on Monday, semiconductor manufacturer Onsemi (ON.O) showcased a robust performance, exceeding projections for both fourth-quarter revenue and profit, driving an approximately 9% surge in early trading. This commendable outcome was fueled by sustained demand for Onsemi’s silicon carbide chips, crucial components in electric vehicle drive trains, and cutting-edge driver-assistance systems, including cameras and sensors.
Amidst restrained consumer spending attributed to elevated interest rates, Onsemi’s silicon carbide chips demonstrated remarkable resilience. This positive outcome stands in stark contrast to industry apprehensions concerning decelerated growth, echoed by cautionary statements from automotive chipmakers and Tesla (TSLA.O) CEO Elon Musk.
For the fourth quarter, Onsemi reported revenue amounting to $2.02 billion, surpassing the anticipated $2 billion as per LSEG data. On an adjusted basis, the company achieved earnings of $1.25 per share, surpassing the projected profit of $1.21 per share.
However, the first-quarter outlook introduced an element of caution, with Onsemi forecasting revenue and profit below analyst predictions. The company envisions first-quarter revenue ranging from $1.80 billion to $1.90 billion, falling short of the expected $1.92 billion. Adjusted diluted earnings per share are anticipated to range from 98 cents to $1.10, with the midpoint trailing analysts’ projections of $1.10 per share.
Worth noting is Onsemi’s prestigious clientele, including major automaker Volkswagen (VOWG_p.DE). The broader industry sentiment aligns with a cautious stance, as evidenced by similar warnings from contemporaries such as Texas Instruments (TXN.O) and Wolfspeed (WOLF.N), citing spending constraints and concerns about a potential surplus in automotive markets.
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