ST Returned to Normal Operations During Q2 2020:Jean-Marc Chery

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STMicroelectronics reported second quarter net revenues of $2.09 billion, gross margin of 35.0 per cent, operating margin of 5.1 per cent, and net income of $90 million or $0.10 diluted earnings per share

STMicroelectronics has reported U.S. GAAP financial results for the second quarter ended June 27, 2020. Companies net revenues totaled $2.09 billion, representing a year-over-year decrease of four per cent.

On a year-over-year basis, the company recorded lower sales in imaging, automotive, and MEMS, partially offset by higher sales in microcontrollers, digital, analog and power discrete. Year-over-year sales to distribution increased 9.7 per cent and to OEMs decreased 9.7 per cent.

“During the second quarter, we returned to normal operations, supporting our customers’ demand and continuing to ensure the health and safety of our employees,” noted Jean-Marc Chery, STMicroelectronics President & CEO.

Revenues sequentially increased in MDG while ADG and AMS decreased

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The company informed that its net revenues decreased 6.5 per cent, 380 basis points better than the mid-point of the company’s guidance, on a sequential basis.

“By product group, revenues sequentially increased in MDG while ADG and AMS decreased.
Gross profit totaled $730 million, representing a year-over-year decrease of 12.2 per cent. Gross margin of 35.0 per cent decreased 320 basis points year-over-year, mainly due to unsaturation charges, including the impact of COVID-19 workforce related
restrictions, and price pressure,” read ST’s official statement.

“The first half of 2020 reflects year-over-year growth of 1.6 per cent, driven by Analog, Imaging and Microcontrollers, partially offset by Automotive and Power Discrete,” added company’s CEO.

ST’s operating income decreased 45.8 per cent to $106 million, compared to $196 million in the year-ago quarter. The company’s operating margin decreased 390 basis points on a year-over-year basis to 5.1 per cent of net revenues, compared to nine per cent in the 2019 second quarter.

Jean-Marc Chery said, “Looking at the third quarter, we expect sequential revenue growth of 17.4 per cent at the mid-point. This growth will be driven by engaged customer programs, new products and improved market conditions. Gross margin is expected to be 36 per cent at the mid-point, including about 200 basis points of unsaturation charges.”

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