Why ON Semiconductor (ONNN) Stock Is Down Today

NEW YORK (TheStreet) -- ON Semiconductor  (ONNN) fell Friday amid a mixed first-quarter report that surpassed analysts' expectations for earnings but came up short on revenue.

Adjusted earnings totaled $75.2 million, or 17 cents a share, while revenue increased year over year to $706.5 million from $661 million. Analysts polled by Thomson Reuters expected the company to earn 15 cents a share on revenue of $711.67 million.

The company issued second-quarter revenue guidance in the range of $738 million to $768 million. Analysts expect second-quarter revenues of $741.82 million.

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First-quarter profit was $58.4 million, or 13 cents a share, up from $23.3 million, or 5 cents a share, in the same period one year earlier.

The stock was down 5.01% to $8.91 at 10:43 a.m.

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Separately, TheStreet Ratings team rates ON SEMICONDUCTOR CORP as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate ON SEMICONDUCTOR CORP (ONNN) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ONNN's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 5.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 119.35% and other important driving factors, this stock has surged by 29.74% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ONNN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • ON SEMICONDUCTOR CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ON SEMICONDUCTOR CORP turned its bottom line around by earning $0.33 versus -$0.20 in the prior year. This year, the market expects an improvement in earnings ($0.79 versus $0.33).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 120.8% when compared to the same quarter one year prior, rising from -$138.20 million to $28.70 million.
  • 39.89% is the gross profit margin for ON SEMICONDUCTOR CORP which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, ONNN's net profit margin of 3.99% significantly trails the industry average.
  • You can view the full analysis from the report here: ONNN Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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