A Look Back at Analog Semiconductors Stocks’ Q2 Earnings: ON Semiconductor (NASDAQ:ON) Vs The Rest Of The Pack

As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the analog semiconductors industry, including ON Semiconductor (NASDAQ:ON) and its peers.

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. 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 15 analog semiconductors stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 1.2% below.

Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

Analog Semiconductors stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.

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 specializing in autos, industrial applications, and power management in cloud data centers.

ON Semiconductor reported revenues of $1.74 billion, down 17.2% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with underwhelming revenue guidance for the next quarter and an increase in its inventory levels.

“We remain dedicated to driving growth through market share gains, doubling down on investments in strategic markets, and expanding the breadth of our portfolio of industry-leading products with analog and mixed-signal solutions,” said Hassane El-Khoury, president and CEO, onsemi.

Interestingly, the stock is up 1.8% since reporting and currently trades at $71.45.

Read our full report on ON Semiconductor here, it’s free.

Best Q2: Himax (NASDAQ:HIMX)

Taiwan-based Himax Technologies (NASDAQ:HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones.

Himax reported revenues of $239.6 million, up 2% year on year, outperforming analysts’ expectations by 2.9%. The business had an exceptional quarter with a significant improvement in its gross margin.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 4.3% since reporting. It currently trades at $5.61.

Is now the time to buy Himax? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Universal Display (NASDAQ:OLED)

Serving major consumer electronics manufacturers, Universal Display (NASDAQ:OLED) is a provider of organic light emitting diode (OLED) technologies used in display and lighting applications.

Universal Display reported revenues of $158.5 million, up 8.1% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a miss of analysts’ EPS estimates and full-year revenue guidance missing analysts’ expectations.

As expected, the stock is down 2.3% since the results and currently trades at $207.60.

Read our full analysis of Universal Display’s results here.

Monolithic Power Systems (NASDAQ:MPWR)

Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ:MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.

Monolithic Power Systems reported revenues of $507.4 million, up 15% year on year. This number topped analysts’ expectations by 3.4%. It was a strong quarter as it also recorded optimistic revenue guidance for the next quarter and a decent beat of analysts’ EPS estimates.

The stock is up 18.1% since reporting and currently trades at $928.22.

Read our full, actionable report on Monolithic Power Systems here, it’s free.

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 $3.82 billion, down 15.6% year on year. This print met analysts’ expectations. Aside from that, it was a slower quarter as it logged a decline in its operating margin.

The stock is up 1.8% since reporting and currently trades at $201.81.

Read our full, actionable report on Texas Instruments here, it’s free.

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