Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at ON Semiconductor (NASDAQ:ON), and the best and worst performers in the analog semiconductors group.
Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. The biggest secular growth drivers currently are the adoption of electric vehicles, 5G networks and Internet of Things connectivity, and demand for chips that reduce power consumption. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.
The 9 analog semiconductors stocks we track reported a strong Q4; on average, revenues beat analyst consensus estimates by 2.68%, while on average next quarter revenue guidance was 4.03% above consensus. Technology stocks have been hit hard on fears of higher interest rates , but analog semiconductors stocks held their ground better than others, with share price down 5.55% since earnings, on average.
Best Q4: ON Semiconductor (NASDAQ:ON)
Spun out of Motorola in 1999, and built through a series of acquisitions, ON Semiconductor (NASDAQ: ON) is a global provider of analog chips with specialization in autos, industrial applications, and power management in cloud data centers.
ON Semiconductor reported revenues of $1.84 billion, up 27.6% year on year, beating analyst expectations by 3.08%. It was an impressive quarter for the company, with a significant improvement in gross margin and a beat on the bottom line.
“Our disciplined execution on transformation initiatives in 2021 resulted in record financial performance and achievement of our financial targets ahead of stated timeline. Revenue for 2021 grew 28.3%. Operating income and free cash flow increased 6 times faster than the revenue as we focus our portfolio on secular megatrends of electric vehicles, ADAS, alternative energy and industrial automation.” said Hassane El-Khoury, president and CEO of onsemi.
The stock is down 4.26% since the results and currently trades at $55.
Is now the time to buy ON Semiconductor? Access our full analysis of the earnings results here, it's free.
Analog Devices (NASDAQ:ADI)
Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ:ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.
Analog Devices reported revenues of $2.68 billion, up 72.2% year on year, beating analyst expectations by 2.87%. It was a very strong quarter for the company, with a significant improvement in inventory levels and a beat on the bottom line.
Analog Devices achieved the fastest revenue growth among its peers. The stock is down 0.01% since the results and currently trades at $161.98.
Is now the time to buy Analog Devices? Access our full analysis of the earnings results here, it's free.
Weakest Q4: Sensata Technologies (NYSE:ST)
Originally a temperature sensor control maker and part of Texas Instruments for 60 years, before eventually being spun out, Sensata Technology Holdings (NYSE: ST) is a leading supplier of analog sensors used in industrial and transportation applications, best known for its dominant position in the tire pressure monitoring systems in cars.
Sensata Technologies reported revenues of $934.5 million, up 3.1% year on year, beating analyst expectations by 1.73%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a slow revenue growth.
The stock is down 13.4% since the results and currently trades at $49.60.
NXP Semiconductors (NASDAQ:NXPI)
Spun off from Dutch electronics giant Philips in 2006, NXP Semiconductors (NASDAQ: NXPI) is a designer and manufacturer of chips used in autos, industrial manufacturing, mobile devices, and communications infrastructure.
NXP Semiconductors reported revenues of $3.03 billion, up 21.2% year on year, beating analyst expectations by 1.19%. It was a very strong quarter for the company, with a significant improvement in gross margin and revenue guidance for the next quarter above analysts' estimates.
The stock is down 16% since the results and currently trades at $172.51.
Texas Instruments (NASDAQ:TXN)
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.
Texas Instruments reported revenues of $4.83 billion, up 18.5% year on year, beating analyst expectations by 9.05%. It was a very strong quarter for the company, with an impressive beat of analyst estimates.
Texas Instruments achieved the strongest analyst estimates beat among the peers. The stock is up 1.04% since the results and currently trades at $176.
The author has no position in any of the stocks mentioned