Onsemi Stock Falls As Sales Slide And Chipmaker Warns Of Challenging Environmental

Key Takeaways

• Onsemi stock fell after the maker and sensor technology chips reported a decrease in sales.
• The maker of chips for power and sensing technologies also reported that it is seeing price declines in some parts of its business.
• Onsemi's first-quarter profit topped analysts' expectations.

Onsemi’s (ON) shares fell Monday after the maker reported a decline in sales. It also warned about pricing, as it dealt with “a challenging macroeconomic environment.”

The company’s first-quarter revenue slumped 22% year-over-year to $1.45 billion, roughly in line with analysts' estimates, as all three of its business segments posted declines. Automotive sales dropped 26%, and during the call with investors, CEO Hassane El-Khoury said “customers remain cautious," according to a transcript provided by Alpha Sense.

The CEO stated that the company “used pricing to increase or defend share in strategic areas in the long-term” and it expects a single-digit percent decrease in certain parts of its businesses.

Onsemi’s adjusted EPS of $0.55 exceeded analysts’ estimates. Its free-cash flow rose 74.7% from $454.7 to $454.7, which El-Khoury said was due to “managing costs, right-sizing the manufacturing footprint, and rationalizing its portfolio.”

Onsemi stated that it expects revenue of $1.4 to $1.5 billion, and earnings per share of $0.48 to $0.58 for the current quarter. Analysts had expected $0.52 and $1.41bn respectively.

Citi analysts, who reiterated a "neutral" rating and $40 price target for the stock Monday, said Onsemi posted "decent" results, but that they "continue to expect cuts to guidance in 2H25 due to a recession, just like many other companies."

Onsemi’s shares have dropped by about 8% in recent trading, to $38.57. They have lost nearly 40% of their original value since the beginning of this year.