ON Semiconductor Reports First Quarter 2007 Results
ON Semiconductor Corp. announced that total revenues in the first quarter of 2007 were $374.2 million, a decrease of approximately 7% from the fourth quarter of 2006. Total revenues during the first quarter included approximately $347.8 million of product revenues and approximately $26.4 million of manufacturing services revenues.
During the first quarter of 2007, the company reported net income of $54.0 million, or $0.18 per share on a fully diluted basis. First quarter 2007 results include approximately $3.3 million associated with stock based compensation expense. During the fourth quarter of 2006, the company reported net income of $87.4 million, or $0.27 per share on a fully diluted basis. Fourth quarter 2006 results included approximately $3.0 million associated with stock based compensation expense and a gain of $10.2 million, or $0.03 per fully diluted share, from a favorable insurance settlement and idle real property sales.
On a mix-adjusted basis, average selling prices in the first quarter of 2007 were down approximately two % from the fourth quarter of 2006. The company’s gross margin in the first quarter was 36.5 %, a decrease of approximately 280 basis points as compared to the fourth quarter of 2006, primarily due to lower capacity utilization associated with manufacturing services and lower pricing, which we anticipated. Gross margins for product revenue were 39.9 % during the first quarter of 2007 compared to 42.1 % during the fourth quarter of 2006. EBITDA for the first quarter of 2007 was $83.6 million. EBITDA for the fourth quarter of 2006 was $114.4 million and included the $10.2 million benefit from a favorable insurance settlement and idle real property sales.
"The first quarter of 2007 was a seasonally slower period for the semiconductor industry. Our consumer driven end-markets of Computing, Consumer Electronics and Wireless, in particular, experienced some headwinds as anticipated in the first quarter," said Keith Jackson, ON Semiconductor President and CEO. "Despite the weaker demand environment in the consumer driven end-markets during the first quarter of 2007, I am excited about how our overall business performed with product revenues at over $347 million and product revenue gross margins at approximately 40%. We believe the inventory correction that has taken place in the industry over the past two quarters is largely behind us and as we look into the second half, we are beginning to see our backlog fill in nicely. We continue to expect a strong second half of 2007."