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Interpreting ON Semiconductor Corp. (ON) International Revenue Trends
Have you looked into how ON Semiconductor Corp. (ON) performed internationally during the quarter ending September 2024? Considering the widespread global presence of this semiconductor components maker, examining the trends in international revenues is essential for assessing its financial resilience and prospects for growth.
In the current era of a tightly interconnected global economy, the proficiency of a company to penetrate international markets significantly influences its financial health and trajectory of growth. For investors, the key is to grasp how reliant a company is on overseas markets, as this provides insights into the durability of its earnings, its ability to exploit different economic cycles, and its overall growth capabilities.
Being present in international markets serves as a counterbalance to domestic economic challenges while offering chances to engage with more rapidly evolving economies. However, this kind of diversification introduces challenges like currency fluctuations, geopolitical uncertainties and varying market trends.
Our review of ON's last quarterly performance uncovered some notable trends in the revenue contributions from its international markets, which are commonly analyzed and tracked by Wall Street experts.
The recent quarter saw the company's total revenue reaching $1.76 billion, marking a decline of 19.2% from the prior-year quarter. Next, we'll examine the breakdown of ON's revenue from abroad to comprehend the significance of its international presence.
A Closer Look at ON's Revenue Streams Abroad
During the quarter, United Kingdom contributed $395.8 million in revenue, making up 22.46% of the total revenue. When compared to the consensus estimate of $394.03 million, this meant a surprise of +0.45%. Looking back, United Kingdom contributed $413.8 million, or 23.85%, in the previous quarter, and $464.2 million, or 21.29%, in the same quarter of the previous year.
Of the total revenue, $449.5 million came from Singapore during the last fiscal quarter, accounting for 25.51%. This represented a surprise of +11.87% as analysts had expected the region to contribute $401.81 million to the total revenue. In comparison, the region contributed $390.3 million, or 22.49%, and $506.8 million, or 23.24%, to total revenue in the previous and year-ago quarters, respectively.
Other International accounted for 9.52% of the company's total revenue during the quarter, translating to $167.8 million. Revenues from this region represented a surprise of +6.86%, with Wall Street analysts collectively expecting $157.03 million. When compared to the preceding quarter and the same quarter in the previous year, Other International contributed $152.7 million (8.80%) and $203.4 million (9.33%) to the total revenue, respectively.
Hong Kong generated $466.9 million in revenues for the company in the last quarter, constituting 26.50% of the total. This represented a surprise of +4.03% compared to the $448.83 million projected by Wall Street analysts. Comparatively, in the previous quarter, Hong Kong accounted for $453.5 million (26.14%), and in the year-ago quarter, it contributed $581.9 million (26.68%) to the total revenue.
International Market Revenue Projections
Wall Street analysts expect ON Semiconductor Corp. to report a total revenue of $1.76 billion in the current fiscal quarter, which suggests a decline of 12.7% from the prior-year quarter. Revenue shares from United Kingdom, Singapore, Other International and Hong Kong are predicted to be 23.2%, 23.2%, 9% and 25.8%, corresponding to amounts of $407.86 million, $409.06 million, $158.77 million and $453.69 million, respectively.
For the entire year, the company's total revenue is forecasted to be $7.12 billion, which is a reduction of 13.7% from the previous year. The revenue contributions from different regions are expected as follows: United Kingdom will contribute 23.3% ($1.66 billion), Singapore 22.9% ($1.63 billion), Other International 8.8% ($629.6 million) and Hong Kong 24.7% ($1.76 billion) to the total revenue.
Closing Remarks
Relying on international markets for revenues, ON Semiconductor Corp. faces both prospects and perils. Thus, tracking the company's international revenue trends is essential for accurately projecting its future trajectory.
In an era of growing international interdependencies and escalating geopolitical disputes, Wall Street analysts are vigilant in tracking these trends for businesses with a global reach, in order to refine their predictions of earnings. It should be noted, however, that a multitude of other elements, such as a company's domestic position, also play a significant role in shaping the earnings forecasts.
We at Zacks strongly focus on the dynamic earnings forecast of companies, given that empirical studies have demonstrated its potent impact on the immediate price movement of stocks. Invariably, there's a positive relationship -- upward earnings predictions often result in an increase in stock prices.
Our proprietary stock rating tool, the Zacks Rank, with its externally validated exceptional track record, harnesses the power of earnings estimate revisions to serve as a dependable measure for anticipating the short-term price trends of stocks.
At the moment, ON Semiconductor Corp. has a Zacks Rank #3 (Hold), signifying that its performance may align with the overall market trend in the upcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
A Look at ON Semiconductor Corp.'s Recent Stock Price Performance
Over the past month, the stock has seen a decline of 0.8% in its value, whereas the Zacks S&P 500 composite has posted an increase of 0.4%. The Zacks Computer and Technology sector, ON Semiconductor Corp.'s industry group, has ascended 2.1% over the identical span. In the past three months, there's been a decline of 0.4% in the company's stock price, against a rise of 5.5% in the S&P 500 index. The broader sector has increased by 5.5% during this interval.
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