ON Semiconductor Corp (NASDAQ:ON) stock rose 2.79% (As on February 7, 11:14:39 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the fourth quarter of FY 22. Fourth quarter non-GAAP gross margin was of 48.4% increased by 321 bps year-over-year. There was record fourth quarter automotive revenue of $989 million grew 54% year-over-year. Free cash flow for fiscal year 2022 increased 22% year-over-year and was 20% of revenue. The non-GAAP operating income grew four times faster than revenue driven by the focus on the secular megatrends of electric vehicles, ADAS, alternative energy and industrial automation.
ON in the fourth quarter of FY 22 has reported the adjusted earnings per share of $1.32, beating the analysts’ estimates for the adjusted earnings per share of $1.27, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 14 percent to $2.1 billion in the fourth quarter of FY 22, beating the analysts’ estimates for revenue of $2.08 billion.
The company also announced that its Board of Directors has approved a new share repurchase program with authorization to repurchase up to $3 billion of shares of the company’s common stock through December 31, 2025.
For the current quarter ending in March, ON Semiconductor Corp. expects its per-share earnings to range from $1.02 to $1.14. The company expects revenue to be in the range of $1.87 billion to $1.97 billion for the fiscal first quarter.
On the other hand, ON announced that it signed a strategic agreement with German Volkswagen AG (VW) to provide modules and semiconductors that enable a complete electric vehicle (EV) traction inverter solution for VW’s next-generation platform family. The semiconductors are part of an overall system optimization and provide a solution that will support the front and rear traction inverters in the VW models. As part of the agreement, onsemi will deliver in a first step its EliteSiC 1200 V traction inverter power modules. The EliteSiC power modules are pin to pin compatible to easily scale the solution to different power levels and types of motors. Teams from the two companies have been collaborating for more than a year on the optimization of the power modules for the next-generation platform, with pre-production samples under development and evaluation.