Yahoo Finance Onsemi beats quarterly estimates, reports stable margins
April 29 (Reuters) - Chipmaker Onsemi beat Wall Street expectations for quarterly revenue and profit on Monday and reported a stable gross margin due to lowered costs, in the face of weakening electric vehicle sales.
"The structural changes we have made to the business over the last three years have enabled us to sustain our gross margin despite challenging market conditions," said CEO Hassane El-Khoury.
The company had said in February that the monetization of fabrication plants it divested in 2022 would be accretive to gross margins.
However, the company forecast second-quarter revenue and profit below analysts' estimates, fanning concerns of a delay in the recovery of automotive chip demand as a softening EV market and excess inventory at customers are expected to hit orders for Onsemi's chips.
Onsemi supplies chips that go into drive trains of electric cars and help with driver-assistance systems like cameras and sensors. The company's silicon carbide chips also help extend the range of electric vehicles.
The company, whose clients include European automaker Volkswagen reported first-quarter revenue of $1.86 billion, beating estimates of $1.85 billion, according to LSEG data.
It reported gross margin of 45.8%, compared with 46.8%, a year ago
On an adjusted basis, the company earned $1.08 per share for the quarter ended March 29, compared with expectations of $1.04 per share.
Onsemi forecast second-quarter revenue in the range of $1.68 billion to $1.78 billion, compared with estimates of $1.83 billion.
It forecast adjusted earnings per share of 86 cents to 98 cents per share. Analysts on average expected $1.01 per share. (Reporting by Zaheer Kachwala in Bengaluru; Editing by Shailesh Kuber)
