What happened

Shares of ON Semiconductor (NASDAQ:ON) slumped on Monday following a mixed fourth-quarter report. Revenue was down but beat analyst expectations, while the bottom line fell short of estimates. The stock was down about 12% at 12:50 p.m. EST today.

So what

ON Semi reported fourth-quarter revenue of $1.40 billion, down 7% year over year and $20 million above the average analyst estimate. The company said it saw improvements in business trends in the fourth quarter that continued into the first quarter.

A circuit board.

Image source: Getty Images.

Non-GAAP (adjusted) earnings per share came in at $0.30, down from $0.53 in the prior-year period and $0.02 lower than analysts were expecting. Gross margin dipped 3.3 percentage points to 34.6%, while total operating expenses were roughly flat.

While earnings were down substantially, the cash flow situation was much worse. Free cash flow was a loss of $20.7 million in the fourth quarter, down from a gain of $289 million in the prior-year period.

Now what

For the first quarter of 2020, the semiconductor company expects revenue between $1.355 billion and $1.405 billion and gross margin between 33.7% and 34.7%. The company's guidance implies non-GAAP EPS of roughly $0.26. In the first quarter of 2019, the company produced revenue of $1.387 billion and non-GAAP EPS of $0.43.

With another earnings decline coming in the first quarter, investors sent shares of ON Semi tumbling. The stock is now down about 1.7% over the past year.

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