Wednesday, silicon solutions provider, ON Semiconductor Corp. (ONNN) reported a swing to profit in the fourth quarter from a loss last year, helped by higher revenues and lower operating expenses. Earnings, as well as revenues for the quarter came in ahead of Street expectations. Looking ahead, the company provided its revenue guidance for the first quarter of fiscal year 2010.
The Phoenix, Arizona-based company's fourth quarter net income attributable to ON Semiconductor was $68 million or $0.15 per share, compared to a loss of $524.7 million or $1.28 per share in the previous year quarter. Profit for the quarter includes $16.9 million or $0.04 per share of net charges from special items.
Fourth quarter, non-GAAP net income surged to $84.9 million or $0.19 per share from $55.2 million or $0.13 per share in the same quarter last year. Results for the quarter including stock based compensation expense of $11.9 million, lower than $6.8 million in the year-ago period.
On average,16 analysts polled by Thomson Reuters expected the company to report earnings of $0.14 per share for the quarter. Analysts' estimates typically exclude one-time items.
In the preceding third quarter, net income attributable to ON Semiconductor was $29.9 million or $0.07 per share, down from $50.6 million or $0.13 per share in the prior year quarter. Excluding items, non-GAAP net income dropped to $70.9 million or $0.16 per share from $100.4 million or $0.25 per share in the year-ago quarter. Total revenue for the fourth quarter grew to $497.1 million from $488.7 million in the comparable quarter last year. Twenty-one Street analyts expected the company to generate revenue of $491 million for the quarter.
In the preceding third quarter, net revenues decreased to $472.9 million from $581.5 million in the same quarter last year.
For the recent fourth quarter, gross profit was $194.6 million compared to $185.7 million and gross margin, including a net charge of about $3.9 million,increased to 39.1% from 38.0 % in the year-ago period. Non-GAAP gross margin increased slightly to 39.9% from 39.6% in the previous year quarter.
Total operating expenses declined to $110.8 million from $689.4 million a year ago. Quarterly operating income was $83.8 million, compared to an operating loss of $503.7 million in the same quarter last year.
The company completed the acquisition of California Micro Devices Corp., on January 27. ON Semiconductor tendered 21.26 million shares on the close of the acquisition which represent about 90.5% of outstanding California Micro Devices shares and an additional 339 thousand shares by notice of guaranteed delivery.
California Micro Devices is specialized in protection solutions for high brightness LED market, LC-based electromagnetic interference or EMI filtering and low capacitance electrostatic discharge or ESD, which complement ON Semiconductor's existing portfolio of protection and lighting solutions.
Keith Jackson, president and CEO said,"During 2009, ON Semiconductor reduced its overall gross debt by approximately $76 million and increased its cash, cash equivalents and short-term investments by approximately $113 million. We believe we entered 2010 in the strongest financial position in the company's history with over $571 million of cash, cash equivalents and short-term investments and lowest net debt position in the company's history of approximately $362 million."
For the full year, the company reported net income of $61 million or $0.14 per share, compared to a loss of $428.9 million or $1.13 per share last year. Non-GAAP net profit plunged to $165.9 million or $0.38 per share from $307.8 million or $0.80 per share in the prior year period. Revenue for the full year slipped to $1.7 billion from $2.1 billion in the previous year.
Analysts expected the company to report profit of $0.33 per share on revenue of $1.76 billion for the full year.
Looking forward, the company anticipates first quarter 2010 revenues in the range of about $515 million to $525 million. Analysts currently expect first quarter revenue to be $479.26 million.
ON Semiconductor also expects gross margin for the first quarter in the range of 40.0% to 41.0% and non-GAAP gross margin in the range of 40.5% to 41.5%. Operating expense is projected to be in the range of $132 million to $136 million and non-GAAP expense between $122 million and $126 million for the first quarter.
Net interest expense and other expenses is estimated in the range of $10 million to $11 million for the first quarter 2010.
ONNN closed Wednesday's regular trading at $7.86, up $0.05 or 0.64%, on a volume of 19.36 million shares. In after hours, the stock fell 0.38% or $0.03, trading at $7.83 on the Nasdaq.
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