onsemi （ON） reported Q2 2024 earnings per share （EPS） of $0.96 and revenue of $1.74 billion, despite a year-over-year revenue decline. The company maintained robust gross margins and experienced a significant increase in free cash flow.
Points
- onsemi reported Q2 2024 EPS of $0.96 and $1.74 billion in revenue.
- GAAP and non-GAAP gross margins were strong at 45.2% and 45.3%, respectively.
- Free cash flow increased by approximately $250 million year over year.
- The company returned around $650 million to shareholders through stock repurchases.
- onsemi provided cautious Q3 2024 guidance, reflecting optimism and a focus on cost management.
Despite a year-over-year revenue decline, onsemi （ON） reported a robust Q2 2024 with an EPS of $0.96 and revenue totaling $1.74 billion. The company successfully maintained strong gross margins, reporting GAAP and non-GAAP gross margins of 45.2% and 45.3%, respectively. One of the standout achievements this quarter was the significant rise in free cash flow, which increased by approximately $250 million year over year. Reflecting its commitment to shareholder value, onsemi returned around $650 million of this free cash flow to shareholders through stock repurchases over the past twelve months.
onsemi Reports Q2 Double Beat
When comparing onsemi’s actual performance to market expectations, the results were mixed. Analysts had anticipated an EPS of $0.92 and revenue of $1.73 billion. The company slightly exceeded the revenue expectation, reporting $1,735.2 million, and delivered a non-GAAP EPS of $0.96. While gross margins were consistent with historical performance, operating margins saw a notable decline. The GAAP operating margin dropped from 32.2% in Q2 2023 to 22.4%, indicating increased operational costs or reduced efficiency. Non-GAAP operating margin also fell from 32.8% in Q2 2023 to 27.5%.
Segment-wise, all business units reported revenue declines both sequentially and year-over-year. The Power Solutions Group （PSG） experienced a 4% sequential decline and a 15% year-over-year decline. The Advanced Solutions Group （AMG） and Intelligent Sensing Group （ISG） also faced significant drops, highlighting the challenges onsemi faces in maintaining its market position amidst evolving industry dynamics.
onsemi Guidance for Q3 2024
Looking ahead, onsemi provided guidance for Q3 2024, projecting revenue between $1,700 million and $1,800 million. The company expects GAAP gross margins to range from 44.3% to 46.3%, with non-GAAP gross margins slightly higher at 44.4% to 46.4%. Operating expenses are anticipated to be between $329 million and $344 million on a GAAP basis, and $305 million to $320 million on a non-GAAP basis.
EPS guidance was also provided, with GAAP diluted EPS expected to range between $0.85 and $0.97, and non-GAAP diluted EPS between $0.91 and $1.03. This cautious optimism reflects onsemi’s strategy to stabilize and potentially improve margins while managing operational costs effectively.
onsemi’s strategic focus remains on driving growth through market share gains, particularly in the automotive sector. This is evidenced by its recent supply agreement with Volkswagen Group. The company continues to invest in strategic markets and expand its portfolio of analog and mixed-signal solutions, positioning itself to capitalize on future growth opportunities.
解説
- onsemi’s Q2 2024 performance, despite revenue declines, showcases its resilience in maintaining strong gross margins and increasing free cash flow.
- The company’s mixed results against market expectations highlight the importance of efficient cost management and strategic investments.
- The projected Q3 2024 guidance reflects a balanced approach of cautious optimism, focusing on stabilizing margins and controlling operational expenses.
- onsemi’s strategic initiatives, particularly in the automotive sector, are critical for its long-term growth and market positioning.