STMicroelectronics NV (NYSE: STM), a key supplier for Tesla Inc (NASDAQ: TSLA) and Apple Inc (NASDAQ: AAPL), reported its fiscal second-quarter 2024 earnings, revealing a significant revenue decline of 25.3% year-on-year to $3.23 billion, slightly above the analyst consensus estimate of $3.20 billion. The company’s EPS of $0.38 also beat the analyst consensus estimate of $0.36.
Segment Performance:
OEM Sales: Decreased by 14.9% Y/Y
Distribution Sales: Fell by 43.7% Y/Y
Analog Products, MEMS, and Sensors (AM&S): Revenue declined 10.0% Y/Y to $1.17 billion, primarily due to a decrease in Imaging.Power and Discrete Products (P&D): Revenue decreased 24.4% Y/Y to $747 million.
Microcontrollers (MCU): Revenue plummeted 46.0% Y/Y to $800 million, mainly due to a decline in General Purpose MCUs.
Digital ICs and RF Products (D&RF): Revenue decreased 7.6% Y/Y to $516 million due to a drop in Advanced Driver-Assistance Systems (ADAS).
Margins:
Gross Margin: Declined by 890 basis points to 40.1%, attributed to a combination of sales price, product mix, and unused capacity charges.
Operating Margin: Decreased by 1,490 basis points to 11.6%.
Financial Position:
STMicroelectronics generated $159 million in free cash flow and had $6.3 billion in cash and equivalents as of June 29, 2024.
The company generated $702 million in operating cash flow.
Jean-Marc Chery, ST President & CEO, noted that Q2 net revenues were above the midpoint of their business outlook range due to higher revenues in Personal Electronics, which were partially offset by lower revenues in Automotive.
He mentioned that contrary to prior expectations, customer orders for Industrial did not improve, and Automotive demand declined.
Outlook:
Q3 2024 Revenue: Expected to be $3.25 billion, a sequential decline of about 0.6%, plus or minus 350 basis points (consensus was $3.58 billion).
Q3 2024 Gross Margin: Expected to be 38.0%, plus or minus 200 basis points.
Fiscal 2024 Revenue: Revised to $13.2 billion – $13.7 billion (previously $14 billion – $15 billion) versus consensus of $14.34 billion.
Fiscal 2024 Gross Margin: Expected to be 40% (previously in the low 40%).
During the first-quarter report, the company maintained a net Capex outlook of $2.5 billion for fiscal 2024. Over the past 12 months, STMicroelectronics' stock has plunged by 23.4%.
Recent Stock Action:
STM shares traded lower by 13.01% at $34.41 in premarket trading on the last check on Thursday.
Segment Performance:
OEM Sales: Decreased by 14.9% Y/Y
Distribution Sales: Fell by 43.7% Y/Y
Analog Products, MEMS, and Sensors (AM&S): Revenue declined 10.0% Y/Y to $1.17 billion, primarily due to a decrease in Imaging.Power and Discrete Products (P&D): Revenue decreased 24.4% Y/Y to $747 million.
Microcontrollers (MCU): Revenue plummeted 46.0% Y/Y to $800 million, mainly due to a decline in General Purpose MCUs.
Digital ICs and RF Products (D&RF): Revenue decreased 7.6% Y/Y to $516 million due to a drop in Advanced Driver-Assistance Systems (ADAS).
Margins:
Gross Margin: Declined by 890 basis points to 40.1%, attributed to a combination of sales price, product mix, and unused capacity charges.
Operating Margin: Decreased by 1,490 basis points to 11.6%.
Financial Position:
STMicroelectronics generated $159 million in free cash flow and had $6.3 billion in cash and equivalents as of June 29, 2024.
The company generated $702 million in operating cash flow.
Jean-Marc Chery, ST President & CEO, noted that Q2 net revenues were above the midpoint of their business outlook range due to higher revenues in Personal Electronics, which were partially offset by lower revenues in Automotive.
He mentioned that contrary to prior expectations, customer orders for Industrial did not improve, and Automotive demand declined.
Outlook:
Q3 2024 Revenue: Expected to be $3.25 billion, a sequential decline of about 0.6%, plus or minus 350 basis points (consensus was $3.58 billion).
Q3 2024 Gross Margin: Expected to be 38.0%, plus or minus 200 basis points.
Fiscal 2024 Revenue: Revised to $13.2 billion – $13.7 billion (previously $14 billion – $15 billion) versus consensus of $14.34 billion.
Fiscal 2024 Gross Margin: Expected to be 40% (previously in the low 40%).
During the first-quarter report, the company maintained a net Capex outlook of $2.5 billion for fiscal 2024. Over the past 12 months, STMicroelectronics' stock has plunged by 23.4%.
Recent Stock Action:
STM shares traded lower by 13.01% at $34.41 in premarket trading on the last check on Thursday.