Boston, MA 11/05/2013 (wallstreetpr) – ON Semiconductor Corp (NASDAQ:ONNN) reported the third quarter earnings on Friday. Though earnings of $0.17 per share were higher than analysts’ expectation of $0.16, revenues of $715.40 million were below expectations of $716.32 million. Revenues also fell by 1.4% for the same quarter last year, though earnings grew from $0.12 per share for the same period last year. The company expects to close the fourth quarter with revenues in the range of $675 million to $705 million, again below analysts’ expectation of $708 million. The company is also expected to close the year with earnings of $0.54 per share for the complete year.
ON semiconductor is engaged in integrating the Sanyo semiconductor business and ensuring that it can meet its own expenses. The loss making semiconductor business was bought in January, 2011 for about $500 million. ON Semiconductor plans to cut 870 jobs in the Sanyo unit. A voluntary retirement plan has been worked out for about 700 employees and is expected to cost $40 million to $48 million. The charges are to be accounted in the fourth quarter. The company is also planning to close down one unit in Hanyu, Japan leading to a reduction in the employee count by 210 jobs including about 170 full time jobs. The company expects to save $36 million to $45 million in the first year itself through these measures. ON semiconductors has also retrenched 250 jobs and cancelled annual cash bonuses for senior executives in an effort to curtail costs. CEO Keith Jackson is upbeat about the future prospects of the company; he said “Despite a sub-optimal demand environment, our core business remains strong with a robust design win pipeline in our target growth areas of automobiles, smartphones, white goods and select segments of the industrial market. At the same time, the headwind to our results from the SANYO Semiconductor Products Group continues to abate as our efforts in stabilizing revenue and optimizing cost structure of the business are beginning to show definitive results. With the measures we recently announced, we believe that we now have a clear line of sight to sustained profitability for our SANYO Semiconductor business from 2014 onwards.”
The stock was down by 2.13% at the close of trading on Monday on the back of some profit booking.