Onsemi on Monday reported fourth-quarter revenue of $1.53 billion for the period ended December 31, a decline of 11% from the prior year and short of the $1.54 billion analysts had been expecting, according to data compiled by LSEG. The Phoenix, Arizona-based semiconductor company said its business was affected by a continued inventory overhang as customers worked through excess chip stocks that were accumulated during the supply chain disruption.
In extended trading, Onsemi shares slid nearly 6% as investors digested the weaker-than-anticipated top-line result and cautious near-term guidance.
Revenue by business unit showed broad-based contraction. The power solutions group, which is Onsemi's largest source of revenue and supplies high-performance power semiconductors, generated $724.2 million in the fourth quarter - down 11% year over year. The intelligent sensing group posted the steepest decline, falling 17% to $249.6 million. The analog and mixed-signal segment declined 9% to $556.3 million.
On an adjusted basis, the company reported earnings of $0.64 per share, modestly ahead of the $0.62 per share analysts had forecast.
Looking to the current quarter, Onsemi offered a first-quarter revenue outlook in the range of $1.44 billion to $1.54 billion. The midpoint of that range sits below analysts' consensus estimate of $1.51 billion, signaling continued near-term pressure on demand.
Industry observers cited a number of headwinds that are weighing on Onsemi's outlook. A persistent inventory glut among customers remains a primary drag as firms work down chip stockpiles that were built up during the supply chain crunch. The company's silicon carbide chip business faces what analysts expect will be ongoing challenges due to intensifying competition from Chinese firms and electric vehicle sales that have expanded more slowly than some forecasts had assumed. Separately, recent reductions in U.S. clean energy tax credits were flagged as a potential near-term deterrent to customer adoption of related technologies.
The public filing and commentary left room for varied near-term outcomes: adjusted EPS topped expectations, but revenue and segment declines, together with conservative guidance, underscore the transitional backdrop for the company as customers normalize inventories and industry dynamics shift.
For investors seeking systematic evaluation, the article noted that ProPicks AI assesses Onsemi (ticker ON) among thousands of companies each month using more than 100 financial metrics. The tool aims to identify stocks with attractive risk-reward characteristics based on current data and highlights whether ON appears in any of its strategies or if there are alternative opportunities within the same sector.