- Year-over-year net sales to OEMs and Distribution increased 21.4 per cent and 76.2 per cent, respectively
- Operating margin improved 420 basis points to 14.6 per cent and net income increased 89.6 per cent to $364 million
STMicroelectronics first quarter net revenues stood at $3.02 billion, gross margin of 39.0 per cent operating margin of 14.6 per cent, and net income of $364 million or $0.39 diluted earnings per share. On a year-over-year basis, the company recorded higher net sales in all product groups except the RF Communications (former “Digital”) sub-group.
Year-over-year net sales to OEMs and Distribution increased 21.4 per cent and 76.2 per cent, respectively. On a sequential basis, net revenues decreased 6.8 per cent, 270 basis points above the mid-point of the Company’s guidance. ADG and MDG reported increases in net revenues on a sequential basis while AMS decreased
Jean-Marc Chery, STMicroelectronics President & CEO, said, “In the first quarter of 2021, net revenues increased 35.2 per cent year-over-year. All product groups contributed to this growth, on continued acceleration of demand globally. Operating margin improved 420 basis points to 14.6 per cent and net income increased 89.6 per cent to $364 million.”
He added that on a sequential basis, net revenues decreased 6.8 per cent, 270 basis points above the mid-point of the outlook. Automotive and Power Discrete products and Microcontrollers increased sequentially, partially offset by Personal Electronics products.
Invest about $2.0 billion in CAPEX
He said, “ST’s second quarter outlook, at the mid-point, is for net revenues of $2.9 billion, increasing year-over-year by 39 per cent, and decreasing sequentially by 3.8 per cent due to usual seasonality in Personal Electronics; gross margin is expected to be about 39.5 per cent. We will drive the Company based on a plan for FY21 revenues of $12.1 billion, plus or minus $150 million, a year-over-year increase of 18.4 per cent at the mid-point. This growth is expected to be driven by strong dynamics in all end markets we address and our engaged customer programs. For 2021, we now plan to invest about $2.0 billion in CAPEX to support the strong market demand and our strategic initiatives.”
Gross profit totaled $1.18 billion, a year-over-year increase of 38.9 per cent. Gross margin of 39.0 per cent increased 110 basis points year-over-year, mainly due to lower unloading charges, manufacturing efficiencies and improved mix partially offset by negative currency effects, net of hedging. First quarter gross margin was 50 basis points above the mid-point of the Company’s guidance mainly due to better product mix.
Operating income increased 90.3 per cent to $440 million, compared to $231 million in the year-ago quarter. It’s operating margin increased 420 basis points on a year-over-year basis to 14.6 per cent of net revenues, compared to 10.4 per cent in the 2020 first quarter.
For Automotive and Discrete Group (ADG), revenue increased in both Automotive and in Power Discrete
By product group, compared with the year-ago quarter, for Automotive and Discrete Group (ADG), revenue increased in both Automotive and in Power Discrete. Operating profit increased by 280.4 per cent to $85 million. Operating margin was 8.2 per cent compared to 3.0 per cent. For Analog, MEMS and Sensors Group (AMS), revenue increased in Analog, MEMS and Imaging. Operating profit increased by 5.4 per cent to $187 million.
Operating margin was 17.2 per cent compared to 20.8 per cent. For Microcontrollers and Digital ICs Group (MDG), revenue increased in Microcontrollers and decreased in RF Communications.Operating profit increased by 140.5 per cent to $172 million. Operating margin was 19.4 per cent compared to 11.5 per cent.
Net income and diluted earnings per share increased to $364 million and $0.39, respectively, compared to $192 million and $0.21, respectively, in the year-ago quarter. Capital expenditure payments, net of proceeds from sales, were $405 million in the first quarter. In the year-ago quarter, capital expenditures, net, were $266 million. Inventory at the end of the first quarter was $1.84 billion, compared to $1.77 billion in the year-ago quarter. Day sales of inventory at quarter-end was 91 days compared to 118 days in the year-ago quarter.
It said, “Free cash flow (non-U.S. GAAP) was $261 million in the first quarter, up from $113 million in the year-ago quarter. In the first quarter, the Company paid cash dividends to its shareholders totaling $38 million and executed a $156 million share buy-back as part of its previously announced share repurchase program. ST’s net financial position (non-U.S. GAAP) was $1.19 billion at April 3, 2021 compared to $1.10 billion at December 31, 2020 and reflected total liquidity of $4.16 billion and total financial debt of $2.97 billion.”
The company’s guidance, at the mid-point, for the 2021 second quarter is. “Net revenues are expected to be $2.9 billion, a decrease of 3.8 per cent sequentially, plus or minus 350 basis points, gross margin of about 39.5 per cent, plus or minus 200 basis points .This outlook is based on an assumed effective currency exchange rate of approximately $1.18 = €1.00 for the 2021 second quarter and includes the impact of existing hedging contracts. The second quarter will close on July 3, 2021. It expects its 2021 CAPEX to be about $2 billion.