Shares of ON Semiconductor Corporation (NASDAQ:ON) fell around 5% in premarket trading on Tuesday after the chipmaker reported fourth-quarter results that slightly topped profit expectations but delivered revenue and forward guidance broadly in line with market forecasts.
The Arizona-based group posted adjusted earnings of $0.64 per share for the quarter ended December, edging past analysts’ consensus estimate of $0.62. Quarterly revenue totaled $1.53 billion, matching expectations.
Chief executive Hassane El-Khoury said the company is seeing “increasing signs of stabilization” across its core end markets, noting that onsemi remains focused on investing in intelligent power and sensing technologies.
Management continues to prioritize exposure to automotive, industrial and AI data-centre power applications, which it sees as the key engines of long-term growth.
For the full 2025 fiscal year, ON Semiconductor generated $1.8 billion in operating cash flow and $1.4 billion in free cash flow, resulting in a record free cash flow margin of 24%. The company said it returned all of that free cash flow to shareholders through share buybacks.
Looking ahead, ON forecast first-quarter 2026 adjusted earnings in the range of $0.56 to $0.66 per share, compared with a consensus forecast of $0.62. Revenue is expected to come in between $1.44 billion and $1.54 billion, versus analyst expectations of roughly $1.51 billion.
Morgan Stanley analyst Joseph Moore said the “revenue guide [was] modestly softer, reflecting portfolio exits and normal seasonality following an in-line DecQ, rather than a change in underlying demand.”
“Long-term (LT) positioning continues to improve, but a replenishment cycle has not yet begun, leaving the NT setup range-bound and fairly priced,” he added.
Bank of America analyst Vivek Arya separately said the results show ON’s core operations are “stabilizing, but non-core exits pressure growth.”
Chief financial officer Thad Trent added that the company’s major investment phase is largely complete, leaving it well placed to benefit from a recovery in market conditions and stronger operating leverage as new technologies scale up.