ON Semiconductor Hits a Low: A Bad Month in the Rearview Mirror

Shares of ON Semiconductor (Nasdaq: ONNN  ) hit a 52-week low on Tuesday. Let's look at how it got here and whether or not more pain is in store.

How it got here
It's been a tough year for ON Semiconductor, after the catastrophic floods in Thailand hit it hard late last year. At the time, the company had to cease some operations as some sites were inoperable, but it has been recovering.

Times remain challenging, however, as the company kicked off August with second-quarter results. Revenue was on the low end of guidance at $744.8 million, and CEO Keith Jackson said the company saw a broad slowdown due to global macro uncertainties. Net income for the quarter was just $6.9 million, or $0.02 per share. Guidance also fell short of expectations, sending shares lower.

Less than three weeks later, the chip maker said it would need to cut 250 jobs and that it would also cancel bonuses for senior executives. Its acquisition of Sanyo continues to be problematic and lose money. Then, at the end of the month, ON Semiconductor announced that Chief Operating Officer John Nelson resigned.

How it stacks up
Let's see how ON Semiconductor stacks up against some of its peers.

ONNN Chart

ONNN data by YCharts.

We'll also compare some fundamental metrics for a deeper read.

Company

P/S (TTM)

Sales growth (MRQ)

Net Margin (TTM)

Return on Equity (TTM)

ON Semiconductor 0.9 (17.8%) (0.6%) (1.5%)
Fairchild Semiconductor (NYSE: FCS  ) 1.3 (16.6%) 4.9% 5.4%
STMicroelectronics (NYSE: STM  ) 0.6 (16.3%) (5.6%) 1.7%
Texas Instruments (Nasdaq: TXN  ) 2.5 (3.6%) 12.1% 14.4%

Source: Reuters. TTM = trailing 12 months. MRQ = most recent quarter.

As you can see, many companies in the semiconductor industry are seeing falling sales, while ON has also had some company-specific troubles. Incidentally, Fairchild, STMicroelectronics, and TI may all benefit to some extent from providing components in Apple's iPhone 5.

What's next?
For ON Semiconductor, it has many hurdles to clear before things get better. Unfortunately for the time being, it looks like more pain may be on the horizon. The next big thing for chip makers is riding the wave of mobile devices, and this company in particular has excellent prospects. This report is totally free, so do yourself a favor and pick up a copy today.

Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple. Motley Fool newsletter services have also recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy.
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