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ON Semiconductor Stock Rises on Earnings Beat and Strong Guidance

ON Semiconductor sees 'accelerating demand' for its products in its strategic automotive and industrial end-markets.

ON Semiconductor  (ON) - Get ON Semiconductor Corporation Report climbed after the company beat Wall Street's second-quarter earnings expectations and offered strong third-quarter guidance.

Shares of the Phoenix chipmaker, which reached an intraday all-time record, were up 14.3% to $44.67 on Monday.

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"We continue to see accelerating demand for our products in our strategic automotive and industrial end-markets," Hassane El-Khoury, president and CEO said in a statement. "As we continue to drive operational efficiencies in our manufacturing sites, we expect to see incremental supply and revenue growth in the second half of 2021."

Net income was $184.1 million, or 42 cents a share, after a loss of $1.4 billion, or essentially breakeven on a per-share basis, a year ago. Adjusted earnings came to 63 cents a share, beating analysts' estimates of 49 cents.

Revenue totaled $1.67 billion, up 38% from a year ago and ahead of Wall Street's call for $1.62 billion.

Analysts at Truist Securities, who have a buy rating and a $46 price target on the shares, said the results and outlook were “strong all around,” and both the automotive and industrial end markets “posted impressive
record revenue.”

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MKM Partners said the earnings report “calls out accelerating demand for the auto and industrial end-markets.”

Looking ahead, ON said it expected revenue to range from $1.66 billion to $1.76 billion, while estimates called for $1.61 billion. The company said it expects adjusted earnings to range from 68 cents to 80 cents a share. Analysts are looking for earnings of 51 cents a share.

The global semiconductor shortage has had an impact on productivity for many companies. 

Last week, Apple  (AAPL) - Get Apple Inc. (AAPL) Report CEO Tim Cook said the global semiconductor shortage would slow the tech giant's iPhone sales growth in the coming months.

Tesla  (TSLA) - Get Tesla Inc Report Elon Musk also warned the shortage in semiconductor supplies remains "quite serious" and could impact production rates over the second half of the year.

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