Q2 results bring hope of Q3 upturn

ON Semiconductor Corp has revealed that total revenues in the second quarter of 2005 were $302.8 million, approximately flat with the first quarter of 2005.

ON Semiconductor Corp has revealed that total revenues in the second quarter of 2005 were $302.8 million, approximately flat with the first quarter of 2005.

During the second quarter of 2005, the company reported net income of $18.5 million, or $0.05 per share, which included restructuring, asset impairments and other charges of $2.8 million.

During the first quarter of 2005, the company reported net income of $14.8 million, or $0.04 per share, which included restructuring, asset impairments and other charges of $1.1 million.

On a mix-adjusted basis, average selling prices in the second quarter of 2005 were down approximately 3% from the first quarter of 2005.

The company's gross margin in the second quarter was 32.5%, an increase of approximately 70 basis points compared with the first quarter of 2005.

EBITDA for the second quarter of 2005 was $59.5 million and included $2.8 million in restructuring, asset impairments and other charges.

EBITDA for the first quarter of 2005 was $55.4 million and included $1.1 million in restructuring, asset impairments and other charges.

The $2.8 million in restructuring, asset impairments and other charges for the second quarter of 2005 included, as previously announced, approximately $3.1 million of cash charges.

These charges were primarily for severance related to the planned transfer of wafer-fab operations from Seremban, Malaysia to Phoenix, and a separate company-wide reduction in force as well as a net reversal of approximately $0.3 million related to prior restructuring activities.

"In the second quarter of 2005, we continued our focus on operational improvements, increasing gross margin while reducing total operating expenses and inventories throughout our supply chain", said Keith Jackson, ON Semiconductor President and CEO.

"Our beginning backlog entering the third quarter increased sequentially for the first time since the second quarter of 2004".

"We believe we have come through the trough in the semiconductor cycle and are excited about the second half of the year".

"Based on booking trends, backlog levels and estimated turns levels, we anticipate that total revenues will be up approximately 2 to 5% sequentially in the third quarter of 2005", Jackson said.

"Backlog levels at the beginning of the third quarter were up from backlog levels at the beginning of the second quarter of 2005, and represented over 80% of our anticipated third quarter revenues".

"We expect that average selling prices will be down approximately 2% for the third quarter of 2005".

"We also expect cost reductions to offset the decline in average selling prices and that gross margins will be flat to slightly up in the third quarter of 2005".

Back to top