ON Gears Up to Report Q2 Earnings: What's in the Cards for the Stock?

On Semiconductor ON is slated to release its second-quarter 2025 results on Aug. 4.

For second-quarter 2025, ON expects revenues between $1.4 billion and $1.5 billion. Earnings are expected to be in the range of 48-58 cents per share.

The Zacks Consensus Estimate for second-quarter 2025 revenues is pegged at $1.45 billion, suggesting a decline of 16.44% from the year-ago quarter’s reported figure. 

The consensus mark for earnings is pegged at 54 cents per share, unchanged in the past 60 days. This indicates a decline of 43.75% from the figure reported in the year-ago quarter.

On Semiconductor’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with the average surprise being 2.80%.

ON Semiconductor Corporation Price and EPS Surprise

ON Semiconductor Corporation price-eps-surprise | ON Semiconductor Corporation Quote

Let us see how things are shaping up for the upcoming announcement.

Factors Likely to Have Influenced ON’s Q2 Performance

ON Semiconductor reported a sequential decline of 26% in the first quarter of 2025 in the automotive segment. Revenues from this segment are expected to have continued declining in a high single-digit percentage quarter over quarter in the second quarter, as the company continues to navigate headwinds from slow EV adoption rate, supply-chain disruptions, and geopolitical uncertainties. 

On the other hand, the industrial segment started to show signs of recovery in the first quarter, and its revenues are expected to have increased mid to high single digits sequentially in the quarter under review.

To sustain its market share in certain areas of its business, ON Semiconductor reduced its pricing by low single digits in the first quarter, as a reaction to competitive threats. No impact on revenues is projected by the company due to this change, as the top line is demand-driven, but the bottom line is expected to have taken a hit in the quarter under review.

Further negative impact on the bottom line is expected to have occurred in the second quarter due to the company’s under-absorption of its resources. ON Semiconductor had stated that its utilization will decline in the quarter to be reported, leading to an expected sequential gross margin decline.

The company went through a company-wide restructuring initiative in the first quarter, reducing its workforce by 9%. It also shut down some of its non-manufacturing sites to drive sustainable efficiency. These actions are expected by the company to have generated approximately $25 million in cost savings in the quarter under review. This is expected to have slightly improved profitability.

What Our Model Says for ON

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.

ON currently has an Earnings ESP of +16.85% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are some other companies worth considering, as our model shows that these, too, have the right combination of elements to beat earnings in their upcoming releases:

Arista Networks ANET currently has an Earnings ESP of +0.96% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks shares have gained 11.5% in the year-to-date (YTD) period. Arista Networks is set to report its second-quarter 2025 results on Aug. 5.

AvePoint AVPT currently has an Earnings ESP of +5.88% and a Zacks Rank #2.

AvePoint shares have increased 15.5% YTD. AvePoint is slated to report its second-quarter 2025 results on Aug. 7.

Alight ALIT has an Earnings ESP of +15.79% and a Zacks Rank #3 at present.

Alight shares have lost 22.5% YTD. Alight is scheduled to report its second-quarter 2025 results on Aug. 5.

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This article originally published on Zacks Investment Research (zacks.com).

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