- STMicroelectronics informed that it will drive the company based on a plan for FY20 revenues between $8.8 billion and $9.5 billion
- The company has registered a 54.3 per cent year-over-year increase in its analog, MEMS and sensors group business during Q1 2020
STMicroelectronics (ST) has reported first quarter net revenues of $2.23 billion, gross margin of 37.9 per cent, operating margin of 10.4 per cent, and net income of $192 million or $0.21 diluted earnings per share. These figures represent ST’s revenue filings for Q1 2020.
“Our revenues came in about five per cent below the mid-point of our outlook when entering the quarter. The COVID-19 outbreak and subsequent containment measures by governments around the world brought challenges in our manufacturing operations and, especially in the last few days of the quarter, logistics. Our Q1 gross margin of 37.9 per cent was largely in line with our mid-point target,” stated Jean-Marc Chery ST president & CEO.
The company has registered a 54.3 per cent year-over-year increase in its analog, MEMS and sensors group business during the first quarter of 2020. There has been a slight increase in its microcontrollers and digital ICs group business. However ST’s automotive and discrete group business has shown a decline of 16.6 per cent during Q1 2020.
Increase in revenues year-over-year
The company has posted net revenue figures of $2,231 million during Q1 2020. These represent a healthy growth of 7.5 per cent year-over-year. ST’s net revenue, during Q1 2019, were $2,076 million.
“In the first quarter of 2020, net revenues increased 7.5 per cent year-over-year, led by higher sales of our Imaging products and growth in analog and microcontrollers, partially offset by lower sales in automotive, power discrete and digital. Operating margin improved to 10.4 per cent and net income increased 7.9 per cent to $192 million,” said Jean-Marc Chery.
He added, “We exited the first quarter with a stable net financial position of $668 million, available liquidity of $2.7 billion and available credit facilities of $1.1 billion.”
Estimating FY20 revenues to be between $8.8 billion and $9.5 billion.
The company plans to drive its business in a way that it is able to reach revenues between $8.8 billion and $9.5 billion during FY 2020. The company had posted net revenue figures of $9.56 billion for FY 2019.
“We will drive the company based on a plan for FY20 revenues between $8.8 billion and $9.5 billion. We plan for growth in the second half over the first half to be in the range of $340 million to $1.04 billion. Growth will be driven by already engaged customer programs and the removal of supply constraints. The growth range is linked to the evolution of the market,” stated Jean-Marc Chery.
It is to be noted here that Coronavirus has made several businesses shut operations worldwide. Global supply chains and ecosystems are not operational due to measures announced by different governments.
Jean-Marc Chery added, “Our second quarter outlook is taking into account the declining demand environment, especially in automotive, as well as the ongoing operational and logistics challenges due to current governmental regulations. We anticipate that all of our manufacturing sites will be operational. Some of them will run at reduced capacity, with unsaturation charges currently estimated to be about 400 basis points.”
The Company’s guidance, at the mid-point, for the 2020 second quarter includes net revenue estimates to around $2.0 billion. These represent a decrease of 10.3 per cent sequentially, plus or minus 350 basis points.
“In response to the global COVID-19 pandemic, we will continue to ensure the health and safety of all our employees and to execute our business continuity plans, working with our customers, partners and the communities where we operate,” concluded Jean-Marc Chery