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ON Semiconductor (NASDAQ:ON) took a hit Monday, falling around 8%, even though its latest earnings and guidance managed to beat Wall Street forecasts. The reason? Investors zeroed in on just how much the company's numbers have dropped from a year ago, a sign that the broader chip market still isn't firing on all cylinders.
For the first quarter, ON brought in about $1.45 billion in revenue down more than 22% from the same period last year, but a touch above the $1.43 billion analysts were expecting. Adjusted earnings landed at $0.55 per share, off nearly 50% year over year, but still $0.05 higher than estimates. Compared to Q4 2024, revenue slid 16%, with the company pointing to ongoing efforts by customers to reset their inventory strategies.
By business segment, Power Solutions dropped 26% to $645.1 million, Analog and Mixed-Signal was down 19% at $566.4 million, and Intelligent Sensing fell 20% to $234.2 million showing softness just about everywhere.
CEO Hassane El-Khoury said the company is staying focused during the downturn, trimming manufacturing output, tightening its cost structure, and sharpening its product mix all of which helped support free cash flow despite the tougher landscape.
Looking to Q2, ON expects revenue to land between $1.40 billion and $1.50 billion, with the midpoint slightly ahead of the $1.41 billion Street forecast. Adjusted earnings are expected to come in between $0.48 and $0.58 a share, compared with a $0.51 consensus.
Other chipmakers like NXP Semiconductors (NASDAQ:NXPI), STMicroelectronics (NYSE:STM), and Texas Instruments (NASDAQ:TXN) each lost about 1% on the day, while Analog Devices (NASDAQ:ADI) was flat showing investors are still cautious across the board.
Even with the beats, the steep declines from last year highlight just how fragile the recovery remains for the semiconductor sector. ON will be back in focus when it reports Q2 results in late July.
This article first appeared on GuruFocus.