STM beyond expectations
A completely different atmosphere is blowing at Stmicroelectronics. The company, which has invested in its plants in Agrate Brianza, closed the first quarter with profits and turnover beyond the forecasts of analysts and the company itself. Net revenues posted “were higher than expectations in the Automotive and Industrial sectors, partly offset by lower revenues in Personal Electronics,” said the CEO of the semiconductor group, Jean-Marc Chery, underlining that “the gross margin of the Q1, at 49.7%, was 170 basis points above the midpoint of our activity forecast range, primarily due to product mix in a pricing environment that remained supportive.
The semiconductor group reported net income of $1.044 billion, $1.10 per share, up 39.8% from $747 million, $0.79 per share, for the same period a year earlier (- 16.3% compared to the previous three months). Revenues grew 19.8% year over year (-4% qoq) to $4.247 billion, versus the company’s $4.2 billion estimate as an interim value at the end of the fourth quarter.
The stock discounts the drop in demand for electronics
Despite the good results, the stock dropped more than 8%, depressed by the “headwinds” linked to the demand for personal electronics and computer peripherals, which weakened further.
Banca Akros analysts expected profits of 908 million dollars, with revenues of 4.17 billion, while those of Intermonte expected profits of 938 million and revenues of 4.2 billion. In the quarter, the gross margin stood at 49.7%, an increase compared to 46.7% in the same period of 2022 and 47.5% in the fourth quarter, against the forecasts of the group for 48% and analysts for 47 .5-48%.
The Italian-French company now expects a second quarter of 2023 with “net revenues of 4.28 billion dollars as an intermediate value, corresponding to year-on-year growth of 11.5% and an increase of 0.8% compared to the previous quarter,” plus or minus 350 basis points, the CEO said. Chery himself underlined that “the gross margin is expected to be around 49%”, more or less 200 basis points, against 49.7% in the first three months of the year. The number one of the semiconductor group also highlighted that “we will now lead the company on the basis of a revenue plan for 2023 between 17 billion dollars and 17.8 billion dollars”. The group has therefore raised the lower part of the range previously estimated: in January the forecast was for annual revenues between 16.8 and 17.8 billion.