ON Semiconductor Corporation (ON Semiconductor) has provided outlook for the fourth quarter of 2008. The company expects revenues to be around 480 to $490 million for the fourth quarter of 2008, down around 16 to 17%, compared with the third quarter of 2008. The company previously guided revenues of around $500 to $550 million for the fourth quarter of 2008.
Due to the timing of the availability of inventory and sales distribution information from our distribution partners globally and ON Semiconductor’s related recognition of revenue on a sell-thru basis, the company will provide full details on fourth quarter and 2008 annual results in its earnings release to be scheduled during the first week of February.
“Our updated fourth quarter 2008 revenue outlook reflects the reduction in demand we have experienced as a result of deteriorating conditions in the global economy,” said Keith Jackson, ON Semiconductor president and chief executive officer. “In the fourth quarter of 2008 we utilized approximately $49.4 million of cash to repurchase $60.9 million of our zero coupon convertible senior subordinated notes and still managed to grow our cash and cash equivalents balance by around $30 million to approximately $450 million. Based on the limited visibility we have for the first quarter of 2009, we anticipate another challenging quarter for the semiconductor industry and the company with revenues down more than normal seasonality. While we are hopeful that the economy will improve as we move through 2009, we have and will continue to examine our overall spending and are prepared to take additional actions to ensure we remain competitive and are positioned to generate positive free cash flow in this challenging environment.”
In the fourth quarter of 2008, the company will also evaluate the carrying value of its goodwill outstanding as of the end of the third quarter of 2008. This is expected to result in a non-cash impairment charge to be recorded in the fourth quarter of 2008 which will be described in further detail in our earnings release and SEC filings.