ON Semiconductor Reports First Quarter 2021 Results
ON Semiconductor Corporation reported a strong first quarter of 2021 with revenue reaching $1,481.7 million, a 16% increase year-over-year. The company achieved a GAAP diluted EPS of $0.20, compared to a loss of $(0.03) a year prior. Non-GAAP diluted EPS improved to $0.35 from $0.10. Gross margin rose to 35.2%, an increase of 370 basis points year-over-year. Automotive revenue peaked at $515 million, up 5% sequentially. The outlook for Q2 2021 suggests estimated revenue between $1,570 million and $1,670 million.
- Revenue increased by 16% year-over-year to $1,481.7 million.
- GAAP diluted EPS improved to $0.20 from a loss of $(0.03) a year ago.
- Non-GAAP diluted EPS jumped to $0.35 from $0.10 year-over-year.
- Gross margin rose to 35.2%, up 370 basis points year-over-year.
- Record automotive revenue of $515 million, a 5% increase sequentially.
- Operating margin decreased to 8.5% from 11.6% quarter-over-quarter.
ON Semiconductor Corporation (Nasdaq: ON) today announced results for the first quarter of 2021 with following highlights:
-
Revenue of
$1,481.7 million increased 16 percent year-over-year -
GAAP diluted earnings per share of
$0.20 as compared to$(0.03) in the quarter a year ago -
Non-GAAP diluted earnings per share of
$0.35 as compared to$0.10 in the quarter a year ago - GAAP and non-GAAP gross margin of 35.2 percent increased 80 basis points quarter-over-quarter and 370 basis points year-over-year
-
Cash provided by operating activities of
$218.5 million as compared to$166.0 million in the quarter a year ago -
Free cash flow of
$141.5 million , as compared to$33.7 million in the quarter a year ago -
Record automotive revenue of
$515 million increased 5 percent quarter-over-quarter
"We delivered strong results driven by disciplined execution in a strong demand environment across our focus end-markets. Our gross margin initiatives are beginning to show early results with first quarter gross margin expanding by 80 basis points quarter-over-quarter. We remain confident in our ability to further expand our margins as we continue to make structural changes to the business," said Hassane El-Khoury, president and CEO of ON Semiconductor.
"The momentum in our strategic automotive and industrial end-markets is accelerating. During the first quarter, we secured key platform design wins for our Silicon Carbide and Silicon based power products, further solidifying our market leadership in vehicle electrification."
Selected financial results for the quarter are shown below with comparable periods: |
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|
GAAP |
Non-GAAP |
|||||||||||||||||
(in millions, except per share data) |
Q1 2021 |
Q4 2020 |
Q1 2020 |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|||||||||||||
Revenue |
|
|
|
|
|
|
|||||||||||||
Gross Margin |
35.2 |
% |
34.4 |
% |
31.5 |
% |
35.2 |
% |
34.4 |
% |
31.5 |
% |
|||||||
Operating Margin |
8.5 |
% |
11.6 |
% |
1.5 |
% |
13.3 |
% |
14.2 |
% |
6.6 |
% |
|||||||
Net Income (Loss) Attributable to ON Semiconductor Corporation |
|
|
( |
|
|
|
|||||||||||||
Diluted Earnings (Loss) Per Share |
|
|
( |
|
|
|
|||||||||||||
Revenue Summary ($ in millions) (Unaudited) |
|
|
|
|||||||||||
|
Three Months Ended |
|
|
|
||||||||||
Business Segment |
Q1 2021 |
Q4 2020 |
Q1 2020 |
|
Sequential
|
Year over Year
|
||||||||
PSG |
$ |
747.0 |
|
$ |
716.4 |
|
$ |
623.9 |
|
|
4 |
% |
20 |
% |
ASG |
531.5 |
|
522.0 |
|
467.1 |
|
|
2 |
% |
14 |
% |
|||
ISG |
203.2 |
|
207.9 |
|
186.9 |
|
|
(2) |
% |
9 |
% |
|||
Total |
$ |
1,481.7 |
|
$ |
1,446.3 |
|
$ |
1,277.9 |
|
|
2 |
% |
16 |
% |
SECOND QUARTER 2021 OUTLOOK
The following table outlines ON Semiconductor's projected second quarter of 2021 GAAP and non-GAAP outlook.
|
Total ON Semiconductor GAAP |
Special Items*** |
Total ON Semiconductor Non-GAAP**** |
Revenue |
|
|
|
Gross Margin |
|
|
|
Operating Expenses |
|
|
|
Other Income and Expense (including interest expense), net |
|
|
|
Diluted Earnings Per Share |
|
|
|
Diluted Shares Outstanding ** |
448 million |
13 million |
435 million |
* |
Convertible Notes, Non-cash interest expense is calculated pursuant to FASB's Accounting Standards Codification Topic 470: Debt. |
|
| ** |
Diluted shares outstanding can vary as a result of, among other things, the actual exercise of options or vesting of restricted stock units, the incremental dilutive shares from the Company's convertible senior subordinated notes, and the repurchase or the issuance of stock or convertible notes or the sale of treasury shares. In periods when the quarterly average stock price per share exceeds |
|
| *** | Special items may include: amortization of acquisition-related intangibles; expensing of appraised inventory fair market value step-up; purchased in-process research and development expenses; restructuring, asset impairments and other, net; goodwill impairment charges; gains and losses on debt prepayment; non-cash interest expense; actuarial (gains) losses on pension plans and other pension benefits; and certain other special items, as necessary. These special items are out of our control and could change significantly from period to period. As a result, we are not able to reasonably estimate and separately present the individual impact or probable significance of these special items, and we are similarly unable to provide a reconciliation of the non-GAAP measures. The reconciliation that is unavailable would include a forward-looking income statement, balance sheet and statement of cash flows in accordance with GAAP. For this reason, we use a projected range of the aggregate amount of special items in order to calculate our projected non-GAAP operating expense outlook. |
|
| **** | We believe these non-GAAP measures provide important supplemental information to investors. We use these measures, together with GAAP measures, for internal managerial purposes and as a means to evaluate period-to-period comparisons. However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance. We believe that non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when taken together with GAAP results and the reconciliations to corresponding GAAP financial measures that we also provide in our releases, provide a more complete understanding of factors and trends affecting our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures, even if they have similar names. |
TELECONFERENCE
ON Semiconductor will host a conference call for the financial community at 9 a.m. Eastern Daylight Time (EDT) on May 3,2021 to discuss this announcement and ON Semiconductor’s 2021 first quarter results. The Company will also provide a real-time audio webcast of the teleconference on the Investor Relations page of its website at http://www.onsemi.com. The webcast replay will be available at this site approximately one hour following the live broadcast and will continue to be available for approximately 30 days following the conference call. Investors and interested parties can also access the conference call via telephone by dialing (833) 303-2043 (U.S./Canada) or: (236) 714-3942 (International). In order to join this conference call, you will be required to provide the Conference ID Number – which is 5398970.
About ON Semiconductor
ON Semiconductor (Nasdaq: ON) is driving energy efficient electronics innovations that help make the world greener, safer, inclusive and connected. The company has transformed into our customers’ supplier of choice for power, analog, sensor and connectivity solutions. The company’s superior products help engineers solve their most unique design challenges in automotive, industrial, cloud power, and Internet of Things (IoT) applications. For more information, visit http://www.onsemi.com.
ON Semiconductor and the ON Semiconductor logo are registered trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders. Although the Company references its website in this news release, information on the website is not to be incorporated herein.
This document includes “forward-looking statements,” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated in this document could be deemed forward-looking statements, particularly statements about the future financial performance of ON Semiconductor, including financial guidance for the year ending December 31, 2021. Forward-looking statements are often characterized by the use of words such as “believes,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans” or “anticipates” or by discussions of strategy, plans or intentions. All forward-looking statements in this document are made based on our current expectations, forecasts, estimates and assumptions and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. Additional factors that could affect our future results or events are described under Part I, Item 1A “Risk Factors” in our 2020 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 16, 2021 (our "2020 Form 10-K") and from time to time in our other SEC reports. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information, except as may be required by law. You should carefully consider the trends, risks and uncertainties described in this document, our 2020 Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to our securities. If any of these trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and you could lose all or part of your investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.
ON SEMICONDUCTOR CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) |
|||||||||||
|
Quarters Ended |
||||||||||
|
April 2, 2021 |
|
December 31,
|
|
April 3, 2020 |
||||||
Revenue |
$ |
1,481.7 |
|
|
$ |
1,446.3 |
|
|
$ |
1,277.9 |
|
Cost of revenue (exclusive of amortization shown below) |
960.5 |
|
|
948.7 |
|
|
875.2 |
|
|||
Gross profit |
521.2 |
|
|
497.6 |
|
|
402.7 |
|
|||
Gross margin |
35.2 |
% |
|
34.4 |
% |
|
31.5 |
% |
|||
Operating expenses: |
|
|
|
|
|
||||||
Research and development |
173.6 |
|
|
159.7 |
|
|
171.0 |
|
|||
Selling and marketing |
78.9 |
|
|
71.0 |
|
|
76.8 |
|
|||
General and administrative |
72.4 |
|
|
62.4 |
|
|
71.2 |
|
|||
Amortization of acquisition-related intangible assets |
25.0 |
|
|
29.3 |
|
|
32.3 |
|
|||
Restructuring, asset impairments and other charges, net |
42.5 |
|
|
7.2 |
|
|
32.8 |
|
|||
Intangible asset impairment |
2.9 |
|
|
— |
|
|
— |
|
|||
Total operating expenses |
395.3 |
|
|
329.6 |
|
|
384.1 |
|
|||
Operating income |
125.9 |
|
|
168.0 |
|
|
18.6 |
|
|||
Other income (expense), net: |
|
|
|
|
|
||||||
Interest expense |
(33.4) |
|
|
(41.8) |
|
|
(42.5) |
|
|||
Interest income |
0.4 |
|
|
0.6 |
|
|
1.9 |
|
|||
Other income (expense) |
4.5 |
|
|
(6.3) |
|
|
0.1 |
|
|||
Other income (expense), net |
(28.5) |
|
|
(47.5) |
|
|
(40.5) |
|
|||
Income (loss) before income taxes |
97.4 |
|
|
120.5 |
|
|
(21.9) |
|
|||
Income tax (provision) benefit |
(7.1) |
|
|
(30.7) |
|
|
8.2 |
|
|||
Net income (loss) |
90.3 |
|
|
89.8 |
|
|
(13.7) |
|
|||
Less: Net income attributable to non-controlling interest |
(0.4) |
|
|
(0.8) |
|
|
(0.3) |
|
|||
Net income (loss) attributable to ON Semiconductor Corporation |
$ |
89.9 |
|
|
$ |
89.0 |
|
|
$ |
(14.0) |
|
Net income (loss) per common share attributable to ON Semiconductor Corporation: |
|
|
|
|
|
||||||
Basic |
$ |
0.22 |
|
|
$ |
0.22 |
|
|
$ |
(0.03) |
|
Diluted |
$ |
0.20 |
|
|
$ |
0.21 |
|
|
$ |
(0.03) |
|
Weighted average common shares outstanding: |
|
|
|
|
|
||||||
Basic |
413.4 |
|
|
411.3 |
|
|
410.6 |
|
|||
Diluted |
445.4 |
|
|
431.6 |
|
|
410.6 |
|
|||
ON SEMICONDUCTOR CORPORATION UNAUDITED CONSOLIDATED BALANCE SHEETS (in millions) |
|||||||||||
|
April 2, 2021 |
|
December 31,
|
|
April 3, 2020 |
||||||
Assets |
|
|
|
|
|
||||||
Cash and cash equivalents |
$ |
1,042.5 |
|
|
$ |
1,080.7 |
|
|
$ |
1,982.0 |
|
Receivables, net |
683.6 |
|
|
676.0 |
|
|
652.0 |
|
|||
Inventories |
1,295.5 |
|
|
1,251.4 |
|
|
1,251.9 |
|
|||
Other current assets |
166.0 |
|
|
176.0 |
|
|
146.4 |
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FAQ
What were ON Semiconductor's revenue figures for Q1 2021?
ON Semiconductor reported revenue of $1,481.7 million for Q1 2021, a 16% increase year-over-year.
How did ON Semiconductor's earnings per share change in Q1 2021?
The GAAP diluted EPS for ON Semiconductor increased to $0.20 in Q1 2021 from a loss of $(0.03) a year ago.
What is the projected revenue outlook for ON Semiconductor in Q2 2021?
ON Semiconductor projects revenue between $1,570 million and $1,670 million for Q2 2021.
What was the gross margin for ON Semiconductor in Q1 2021?
The gross margin for ON Semiconductor in Q1 2021 was 35.2%, an increase of 370 basis points year-over-year.
What was the performance of automotive revenue for ON Semiconductor in Q1 2021?
The automotive revenue for ON Semiconductor reached a record $515 million, reflecting a 5% increase quarter-over-quarter.
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