onsemi grows revenue and cash flow as quarterly margins improve
onsemi reported an 11 per cent annual increase in third-quarter revenue to 1,722 million dollars. Operating cash flow and free cash flow also increased, while adjusted gross margin improved for a fifth consecutive quarter. Management cited growing demand from artificial intelligence data centers and industrial customers and set a fourth-quarter revenue outlook of 1,715–1,815 million dollars.
Economics & Markets··Evening
Quarterly revenue reaches 1,722 million dollars
onsemi, a maker of power and sensing semiconductors, increased third-quarter revenue by 11 per cent from a year earlier. The company reported revenue of approximately 1.72 billion dollars and adjusted earnings per share of 0.90 dollars in its November 2 results. Both figures were above their year-earlier levels.[1], [2]
The detailed revenue total was 1,722.3 million dollars, compared with 1,603.5 million dollars in the preceding quarter and 1,550.9 million dollars a year earlier. Power Solutions contributed 889.9 million dollars, the analog business 597.3 million dollars and sensing 235.1 million dollars. Management said revenue from artificial intelligence data centers grew 39 per cent sequentially and 175 per cent annually, citing higher power requirements and demand from industrial customers.[1]
Gross margin improves for a fifth quarter
Reported gross margin was 41.4 per cent, while adjusted gross margin reached 41.2 per cent. The adjusted measure increased 190 basis points, from the preceding quarter and improved for a fifth consecutive quarter. Management linked margin development to its product mix and initiatives across its fabrication network. Reported operating margin was 22 per cent and adjusted operating margin was 23.2 per cent.[1]
Net income attributable to the company was 313.9 million dollars. Reported diluted earnings per share were 0.79 dollars. Operating cash flow rose 23 per cent to 516 million dollars, and free cash flow increased 31 per cent to 489 million dollars. The company put free cash flow at approximately 28 per cent of revenue for the quarter. Its cash flow reconciliation deducts spending on property, plant and equipment from operating cash.[1]
Fourth-quarter guidance sets revenue and margin ranges
For the fourth quarter, onsemi projects revenue of 1,715–1,815 million dollars. Reported gross margin is expected at 41.4–43.4 per cent and adjusted gross margin at 41.5–43.5 per cent. Management forecasts reported earnings per share of 0.88–1.00 dollars and adjusted earnings of 0.95–1.07 dollars. Adjusted operating expenses are projected at 303–318 million dollars. These ranges are the company’s outlook for the quarter following the completed reporting period.[1]
