Chipmaker Onsemi revises Synaptics deal, Q3 results beat

Overview

• US chipmaker's Q3 revenue rose 11% yr/yr, beating analyst expectations

• Adjusted EPS for Q3 beat analyst expectations

• Company to acquire Ferric, revises Synaptics deal to $5.7 bln cash

Outlook

• Company expects Q4 revenue between $1.715 bln and $1.815 bln

• Company sees Q4 non-GAAP diluted EPS of $0.95 to $1.07

• onsemi forecasts Q4 non-GAAP gross margin of 41.5% to 43.5%

Result Drivers

• AI DATA CENTER DEMAND - Co said accelerated demand in AI data center and industrial end markets drove revenue growth, citing 39% sequential and 175% yr/yr increase in AI data center revenue

• MARGIN EXPANSION - Co attributed gross margin expansion for the fifth consecutive qtr to ongoing fab right initiatives and ramp of new differentiated products, per CFO Thad Trent

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 13 "strong buy" or "buy", 17 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the semiconductors peer group is "buy"

• Wall Street's median 12-month price target for ON Semiconductor Corp is $100.00, about 39.5% above its October 30 closing price of $71.67

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 21 three months ago

Reuters Recommended Reads

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)