onsemi (ON), a leading semiconductor company, reported its first quarter 2024 earnings, surpassing expectations with an adjusted EPS of $1.08, which is $0.04 higher than the consensus of $1.04. The company’s revenue also exceeded forecasts, coming in at $1.86 billion against the anticipated $1.85 billion.
Despite a challenging market, onsemi’s structural business changes over the past three years have allowed the company to maintain a robust gross margin, as indicated by President and CEO Hassane El-Khoury. He emphasized the company’s focus on execution and investment for long-term growth, particularly in the power and sensing technology sectors, which are crucial for meeting the world’s growing energy efficiency demands.
The company’s stock saw an increase of 2.85% following the earnings release. While the first quarter performance was strong, onsemi’s guidance for the second quarter of 2024 fell short of expectations. The company projects an adjusted EPS between $0.86 and $0.98, with a midpoint of $0.92, which is below the consensus estimate of $1.01. Additionally, the revenue forecast for the second quarter is set at $1.68 to $1.78 billion, with a midpoint of $1.73 billion, also below the anticipated $1.825 billion.
El-Khoury’s statement from the earnings release highlighted the company’s commitment to shareholder returns, noting that approximately 100% of the free cash flow over the last twelve months was allocated to stock repurchases. This approach reflects the company’s confidence in its financial stability and its dedication to delivering value to its shareholders.
As onsemi navigates the current market environment, its strategic focus on power efficiency and industry-leading technologies positions it to potentially continue gaining market share. The company’s performance and forward-looking statements demonstrate a balance between immediate financial prudence and a long-term vision for growth in the evolving semiconductor industry.
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