Key Takeaways

Onsemi ( ON ) shares tumbled Monday after the maker of power and sensing technology chips reported a drop in sales and warned about pricing as it dealt with a “challenging macroeconomic environment.”

The company’s first-quarter revenue slumped 22% year-over-year to $1.45 billion, roughly in line with analysts' estimates, as all three of its business segments posted declines. Automotive sales dropped 26%, and during the call with investors, CEO Hassane El-Khoury said “customers remain cautious," according to a transcript provided by Alpha Sense.

The CEO noted that while the company has “used pricing to defend or increase share in strategic areas over the long-term,” it expects a low-single-digit percent decline in certain parts of its business.

Onsemi's adjusted earnings per share (EPS) of $0.55 topped analysts' estimates and its free cash flow soared 74.7% to $454.7 million, which El-Khoury attributed to “managing our cost structure, right-sizing our manufacturing footprint, and rationalizing our portfolio.”

Onsemi said it sees current-quarter EPS of $0.48 to $0.58, and revenue of $1.4 billion to $1.5 billion. Analysts were looking for $0.52 and $1.41 billion, respectively.

Citi analysts, who reiterated a "neutral" rating and $40 price target for the stock Monday, said Onsemi posted "decent" results, but that they "continue to expect cuts to guidance in 2H25 due to a recession, just like many other companies."

Shares of Onsemi were down about 8% at $38.57 in recent trading and have lost close to 40% of their value since the start of the year.

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