ON Semiconductor Corporation (Nasdaq: ONNN), driving energy efficient innovation, today announced that total revenues in the second quarter of 2014 were $757.6 million, up approximately 7.2 percent compared to the first quarter of 2014. During the second quarter of 2014, the company reported GAAP net income of $88.0 million, or $0.20 per diluted share. The second quarter 2014 GAAP net income was negatively impacted by approximately $1.7 million of special items. The complete special items detail can be found in the attached schedules.
Second quarter 2014 non-GAAP net income was $89.7 million, or $0.20 per diluted share, compared to $75.2 million, or $0.17 per diluted share, for the first quarter of 2014. A reconciliation of these non-GAAP financial measures (and other non-GAAP measures used elsewhere in this release) to the company's most directly comparable measures prepared in accordance with U.S. GAAP are set forth in the attached schedules and on our website at http://www.onsemi.com. Additional information on revenue by end market, region, distribution channel and business unit, and share count can be found on the "Investors" section of our website.
On a mix-adjusted basis, average selling prices for ON Semiconductor in the second quarter of 2014 were down slightly more than one percent when compared to the first quarter of 2014. Total company GAAP gross margin in the second quarter was 36.0 percent and total company non-GAAP gross margin in the second quarter was 36.2 percent. For the second quarter of 2014, GAAP operating margin was 10.8 percent, whereas non-GAAP operating margin was 13.4 percent.
Adjusted EBITDA for the second quarter of 2014 was $146.5 million. Adjusted EBITDA for the first quarter of 2014 was $131.0 million.
“Our strong revenue growth and margin expansion in the second quarter clearly point to our momentum in key markets and improving operating performance," said Keith Jackson, president and CEO of ON Semiconductor. "Our strategy of focusing on automotive, industrial and smartphone end-markets is yielding results. Our revenue in these markets, which comprise approximately 65 percent of our total revenue, grew by more than 10 percent year-over-year during the first half of the year, well ahead of our stated goal of annual growth in the mid to high single digit percentage point range.
"Revenue growth along with an optimal cost structure and additional benefits from previously announced restructuring measures should enable us to generate strong operating leverage going forward. With our recent acquisition of Truesense, the pending acquisition of Aptina Imaging and recently announced foundry partnership with Fujitsu Semiconductor, we are well positioned for further growth in our revenue and earnings."
THIRD QUARTER 2014 OUTLOOK
“Based upon product booking trends, backlog levels and estimated turns levels, we anticipate that total ON Semiconductor revenue will be approximately $765 to $795 million in the third quarter of 2014,” Jackson said. “Backlog levels for the third quarter of 2014 represent approximately 80 to 85 percent of our anticipated third quarter 2014 revenue. Average selling prices for the third quarter of 2014 are expected to be down approximately one to two percent when compared to the second quarter of 2014. The outlook for the third quarter of 2014 includes stock-based compensation expense of approximately $11 to $13 million. Our guidance for the third quarter of 2014 does not include any contribution from our pending acquisition of Aptina, Inc."