Onto Innovation Misses Q4 Targets But Guides Higher Than Views

Semiconductor equipment maker Onto Innovation (ONTO) late Thursday narrowly missed Wall Street’s targets for the fourth quarter. But it guided above views for the current period. Onto stock fell in late trades.

The Wilmington, Mass.-based company earned an adjusted $1.26 a share on sales of $266.9 million in the December quarter. Analysts polled by FactSet had expected earnings of $1.28 a share on sales of $267.3 million. On a year-over-year basis, Onto earnings dropped 17% while sales inched up 1%.

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It was the company’s third consecutive quarter of declining earnings on a year-over-year basis.

For the current quarter, Onto predicted adjusted earnings of $1.31 a share on sales of $280 million. That’s based on the midpoint of its guidance. Wall Street was modeling earnings of $1.28 a share on sales of $272.5 million. In the first quarter last year, Onto earned an adjusted $1.51 a share on sales of $267 million.

Onto makes process control technologies for semiconductor manufacturers.

In after-hours trading on the stock market today, Onto stock dipped more than 1% to 222.20. During the regular session Thursday, Onto stock rose 2.4% to close at 225.33. Onto hit its all-time high of 238.93 in July 2024.

CEO Remains Positive On Prospects

“With global AI investment fueling a robust upcycle in semiconductor capital equipment spending, our deep and broad portfolio across advanced packaging, advanced nodes and specialty devices positions us to capitalize on the high growth segments of the market,” Chief Executive Mike Plisinski said in a news release.

He added, “We are also seeing strong customer engagement across our new products to address their most critical metrology and inspection challenges, reinforcing our confidence in our ability to outgrow the semiconductor equipment market in 2026 and beyond.”

Onto Stock Rated Outperform

Onto’s Q4 report was its first since it closed its $495 million acquisition of key product lines from the materials analysis business of Semilab International on Nov. 17.

With the deal, Onto added unique materials composition and electrical analysis product lines to its portfolio.

Onto is well positioned to benefit from acceleration in leading-edge memory and high bandwidth memory (HBM) spending, since about 32% of its revenue is tied to the memory market, Evercore ISI analyst Vedvati Shrotre said in a client note Wednesday. She rates Onto stock as outperform with a price target of 250.

Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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