ON Semiconductor shares fall despite earnings beat

Investing.com -- ON Semiconductor Corporation stock dropped roughly 4% in after-hours trading on Monday following the release of its third-quarter financial results.

The company reported earnings per share of $0.90 for the third quarter, exceeding the analyst estimate of $0.87. Revenue reached $1.72 billion, also above the consensus estimate of $1.7 billion.

For the fourth quarter of 2026, ON Semiconductor projects earnings per share between $0.95 and $1.07, compared to the analyst consensus of $0.88.

"Increasing power requirements are driving accelerated demand in our AI data center and industrial end markets, as customers adopt and ramp our differentiated products," said Hassane El-Khoury, President and CEO of onsemi. "Our third quarter revenue, gross margin and earnings per share exceeded the midpoint of our guidance, while AI data center revenue grew 39% sequentially and 175% year-over-year."

Additionally, the company said it will acquire Ferric, Inc., a developer of integrated voltage regulator technology, for $600 million in cash at closing, plus up to $175 million in contingent consideration tied to revenue milestones. The deal is expected to close by the end of 2026 and will be funded with cash on hand. Approximately 50 Ferric employees, based primarily in New York and Silicon Valley, are expected to join onsemi.

Ferric holds more than 40 patents and brings engineering expertise in integrated voltage regulation and advanced magnetics. The acquisition raises onsemi's 2030 AI data center revenue target by $500 million to greater than $3 billion.

The company also announced revised terms for its planned acquisition of Synaptics, for approximately $5.7 billion in cash compared to $7 billion in stock under the prior agreement.

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