STMicroelectronics Reports 2019 Third Quarter Financial Results

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  • Net revenues totaled $2.55 billion in Q3
  • The gross profit totaled to $967 million
  • Q3 also witnessed the operating income go down by 15.6 per cent to $336 million

STMicroelectronics reported U.S. GAAP financial results for the third quarter ended September 28, 2019. This press release also contains non-U.S. GAAP measures.

ST reported third-quarter net revenues of $2.55 billion, gross margin of 37.9 per cent, operating margin of 13.1 per cent, and net income of $302 million or $0.34 diluted earnings per share.

Jean-Marc Chery, president and CEO of STMicroelectronics commented:

  • “Third-quarter net revenues grew 17.5 per cent sequentially, above the mid-point of our guidance of 15.3 per cent, driven by engaged customer programs and new products in, as expected, a soft legacy automotive and industrial market 
  • “Our third-quarter operating margin was 13.1 per cent and we returned to positive free cash flow while investing in key programs for our growth over the mid-term 
  • “ST’s fourth-quarter outlook, at the mid-point, is for net revenues to grow
    sequentially about 5.0 per cent, translating into year-over-year growth of about 1.2 per cent; gross margin is expected to be about 38.2 per cent, including about 120 basis points of unsaturation charges
     
  • “For the full year 2019, we expect net revenues at the mid-point to be about $9.48 billion, accompanied by a double-digit operating margin performance.”

A mixed bag delivered

Net revenues
totaled $2.55 billion. On a sequential basis, revenue increased 17.5 per cent, 220 basis points better than the mid-point of the company’s guidance. On a year-over-year basis, third-quarter net revenues increased by 1.2 per cent as the Company recorded higher sales in imaging, analog, power discrete and MEMS largely offset by lower digital ICs, automotive and microcontrollers sales. On a year-over-year basis, sales to OEMs increased by 7.2 per cent, while distribution decreased by 11.6 per cent.

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Gross profit totaled $967 million, representing a year-over-year decrease of 3.6 per cent. Gross margin of 37.9 per cent decreased 190 basis points year-over-year, mainly impacted by price pressure and unsaturation charges. The third-quarter gross margin was 40 basis points higher than the mid-point of the Company’s guidance, mainly due to a lower level of unsaturation charges. The third-quarter gross margin includes about 110 basis points of unsaturation charges.

Operating income decreased by 15.6 per cent to $336 million, compared to $398 million in the year-ago quarter. The company’s operating margin decreased 270 basis points on a year-over-year basis to 13.1 per cent of net revenues, compared to 15.8 per cent in the 2018 third quarter.

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