ON Semiconductor stock drops after earnings beat and $3 billion repurchase program, but outlook was downbeat

Shares of ON Semiconductor Corp.
ON,
-0.61%
dropped 3.6% in premarket trading Monday, after the maker of semiconductors for the automotive and industrial markets reported fourth-quarter results that topped expectations and announced a new $3 billion stock repurchase program, but provided a downbeat outlook. The stock’s selloff comes just two sessions after it closed at a record $82.12. Net income nearly doubled to $604.3 million, or $1.35 a share, from $311.9 million, or 70 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of $1.32 beat the FactSet consensus of $1.26. Revenue grew 4.1% to $2.10 billion, above the FactSet consensus of $2.08 billion. For the first quarter, the company expects adjusted EPS of $1.02 to $1.14, compared with the FactSet consensus of $1.14, and revenue of $1.87 billion to $1.97 billion, which is below the FactSet consensus of $2.00 billion. The new $3 billion stock buyback program represents 8.6% of the company’s market capitalization of $34.98 billion as of Friday’s close. The stock has run up 28.0% over the past three months through Friday, while the PHLX Semiconductor Index
SOX,
-1.09%
has climbed 28.5% and the S&P 500
SPX,
-0.60%
has rallied 9.7%.