ON Semiconductor Reports Robust Fourth Quarter Despite Economic Slowdown

February 04, 2019 by Scott McMahan

ON Semiconductor Corporation posted total revenue in the fourth quarter of 2018 of $1,503.1 million, up about nine percent compared to the same quarter of the previous year. Fourth quarter revenue was down about three percent compared to the previous quarter.

"We once again delivered strong performance in the fourth quarter despite slowdown in macroeconomic conditions. Key secular trends driving growth in our content in automotive, industrial, and cloud-power end-markets remain intact, and we remain upbeat about our medium to long term outlook. Our design-win pipeline in our strategic markets is growing at a strong pace, our customer engagements are strengthening, and our competitive position is improving significantly," said Keith Jackson, president and CEO of ON Semiconductor. "Despite confidence in our medium to long term outlook, we remain cognizant of slowing macroeconomic conditions, and we are managing our business prudently to adjust to changing demand environment."

"Along with strong revenue performance, we intend to continue to deliver solid margin and free cash flow performance through strong execution on operational front."

First Quarter 2019 Outlook

Based on product booking trends, backlog levels, and estimated turns levels, the company anticipates that total revenue in first quarter of 2019 will reach about $1,365 to $1,415 million. The first quarter 2019 gross margin outlook includes the negative impact of 50 basis points (-0.5%) from manufacturing services provided by ON Semiconductor Aizu Co., Ltd.

The first quarter gross margin is projected to be about 36.4% to 37.4%.

GAAP operating expenses are predicted to be between $330 and $348 million and total Non-GAAP between $300 and $314 million.

The outlook for the first quarter of 2019 includes an expected stock-based compensation expense of about $19 million to $21 million. Net cash paid for income taxes is projected to be $16 million to $20 million.