(August 2) The Philadelphia Semiconductor Index is up 1.6%, outperforming the 0.3% gain for the broader tech sector (NYSEARCA:XLK) after chipmaker ON Semiconductor (NASDAQ:ON) reported strong earnings and an upside forecast despite the continuing supply chain constraints.
ON Semiconductor stock surges over 14% after record earnings that beat expectations, upbeat outlook.
Shares of ON Semiconductor Corp. (ON) shot up over 14% in morning trading Monday, after the chipmaker reported record adjusted profit and revenue that beat expectations and provided an upbeat outlook, citing accelerating demand in the automotive and industrial end markets.
- Net income was $184.1 million, or 42 cents a share, after a loss of $1.4 billion, or roughly breakeven on a per-share basis, in the year-ago period.
- Excluding nonrecurring items, adjusted earnings per share increased to a record 63 cents from 12 cents, beating the FactSet consensus of 49 cents.
- Revenue grew 37.6% to $1.67 billion, above the FactSet consensus of $1.62 billion.
- For the third quarter, the company expects adjusted EPS of 68 cents to 80 cents and revenue of $1.66 billion to $1.76 billion, above the FactSet consensus for EPS of 51 cents and revenue of $1.61 billion.
- Gross margin is expected to improve to 38.8% to 40.9% in the third quarter from 38.3% in the second quarter.
The stock has rallied 19.3% year to date through Friday, while the PHLX Semiconductor Index has run up 20.1% and the S&P 500 has advanced 17.0%.
MKM Partners notes that ON called out "accelerating demand for the auto and industrial end markets" even as the global chip shortage continues.
Top semiconductor gainers include ON's auto chip peers Microchip (MCHP +3.3%) and NXP Semiconductors (NXPI +2.6%) with the latter reporting earnings today after the bell. Semiconductor equipment players Applied Materials (AMAT +3.2%) and Lam Research (LRCX +2.0%) are also among the top tech gainers.
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