Why ON Semiconductor Hit a 15-Year High: Could It Run More?

By Chris Lange Updated Jan 12, 2:54PM EST · Published Feb 13, 8:50AM EST

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Why ON Semiconductor Hit a 15-Year High: Could It Run More? — © Thinkstock

[cnxvideo id=”655422″ placement=”ros”]ON Semiconductor Corp. (NASDAQ: ON) reported its fourth-quarter financial results early on Monday and saw its shares hit a high not seen in over 15 years. The company said that it had $0.32 in earnings per share (EPS) and $1.26 billion in revenue, versus consensus estimates from Thomson Reuters that called for $0.23 in EPS and revenue of $1.22 billion. The same period of last year reportedly had EPS of $0.19 and $840.3 million in revenue.

Part of what helped to push revenue even higher for this quarter was the contribution of roughly $358 million from the acquisition of Fairchild, which closed in September 2016.

The prospects for this company look very strong as it continues to expand in auto, industrial and communications markets. Also synergies from Fairchild the strong execution and cost control are positioning the company to drive meaningful growth and cash flow in the coming years.

[nativounit]

In terms of guidance for the first quarter, the company expects to see revenues in the range of $1.215 billion to $1.265 billion with a gross margin of 34% to 36%. The consensus estimates call for $0.23 in EPS and $1.2 billion in revenue for the current quarter.

On the books, ON Semiconductor’s cash and cash equivalents totaled $1.028 billion at the end of the quarter, versus $617.6 million in the same period from last year.

Keith Jackson, president and chief executive of ON Semiconductor, commented:

Our results in the fourth quarter provide clear evidence of our strong execution on the integration of Fairchild, and the results also validate our strategic and financial rationale for the acquisition. We continue to make rapid progress in the integration, and we are currently tracking significantly ahead of schedule in realizing synergies from the combination of Fairchild and ON Semiconductor.

Shares of On Semiconductor closed Friday at $14.14, with a consensus analyst price target of $14.76 and a 52-week trading range of $7.25 to $14.29. Following the release of the earnings report, the stock was up over 8% at $15.30 in early trading indications on Monday.

[wallst_email_signup]

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.