ST quarterly results shake off smartphone blues

April 25, 2018 // By Peter Clarke
STMicroelectronics NV (Geneva, Switzerland) has posted strong results for the first quarter despite some seasonal weakness in sales into smartphones.

That weakness was more than compensated for by better than seasonal performance in automotive and industrial sales due to demand from smart-driving and Internet of Things applications, the company said.

ST made a net profit of $239 million on revenues of $2.23 billion, up 22.2 percent year-on-year in the first quarter of 2018. The profit was more than double what it was a year before.

The company's three product divisions all delivered double-digit percentage growth year-on-year.

The Microcontrollers and Digital ICs Group (MDG) revenues were up 26.5 percent to $750 million, driven by an expansion in microcontroller sales. Automotive and Discrete Group (ADG) revenues were higher by 15.4 percent at $817 million with strong growth in both areas.

The Analog, MEMS and Sensors Group (AMS) revenues increased 26.4 percent to $655 million on sharply higher imaging sales as well as growth in analog circuits and MEMS. However, it is notable that AMS sales fell 27.4 percent sequentially from $902 million in 4Q17. ST said this reflected unfavourable seasonal dynamics for sales into smartphones of imaging components.

During 2017 there was much speculation that ST would do well by Apple's launches of the iPhone 8 and the iPhone X. There is now speculation that Apple failed to gain expected traction with one or both phones and is cutting back its orders (see TSMC cuts forecasts on smartphone weakness).

ST’s net financial position was $522 million at March 31, 2018 compared to $489 million at December 31, 2017.

The company forecast that the 2Q18 revenue would be up by 1.5 percent plus or minus 3.5 percent.

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