Chip supplier ON Semi had a slow — but better than expected — quarter

Shares of ON Semiconductor fell as much as 5% during premarket trading on Monday, despite beating expectations for the quarter. The stock rebounded after the market opened but wavered between positive and negative territory.

Sales for the quarter were $1.76 billion, a 19.2% decrease from a year ago. Analysts forecasted $1.75 billion. The company reported adjusted earnings per share of $0.99 per share, more than Wall Street’s expectation of $0.97.

ON Semi makes analog chips designed for the industrial and automotive markets. Over the past year, auto manufacturers bought fewer chips designed for cars due to an inventory stockpile during the pandemic, which resulted in declining revenue for ON Semi. The stock is down about 12% so far this year.

The company might be seeing signs of recovery, however. In a press release, CEO Hassane El-Khoury said the company saw rising demand for power in key markets: “We are investing to win across the entire power spectrum to ensure that ON Semi is best positioned to gain share in automotive, industrial, and AI data center.”