ON Semiconductor latest chipmaker to warn

ON Semiconductor joined the rest of the semiconductor industry Tuesday when it warned that its fourth-quarter sales and earnings will fall well below analysts’ estimates.

ON Semiconductor (Nasdaq: ONNN) shares closed off 22 cents to $8.75 ahead of the warning.

Company officials told investors to expect a 7 percent to 9 percent decline in sales from the third quarter and earnings of between 10 cents to 12 cents a share.

First Call Corp. consensus expected it to earn 18 cents a share in the quarter.

“Overall demand has softened in recent weeks and customers have delayed or cancelled existing orders to manage their inventories in line with their incoming business,” said CEO Steven Hanson in a prepared release. “Consequently, turns for the quarter have been lower than normal. We are experiencing the same softness in the computing, communications and consumer markets that has been observed by most of our competitors and customers.”

The company said it expects first-quarter sales to be fall 5 percent to 7 percent from the watered down fourth-quarter estimates.

Last quarter, ON Semiconductor beat the Street, earning $33.2 million, or 19 cents a share, on sales of $539 million.

The stock moved as high as $27.75 following its strong initial public offering in April.

All five analysts following the stock maintain either a “buy” or “strong buy” recommendation.

Analysts are projecting a profit of $1.19 a share in fiscal 2001, a target that seems a bit optimistic considering the predicted sales decline in the first quarter.