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STMicroelectronics is on track for $17bn of revenue this year, marking a more bullish prediction than last year in the face of the market downturn.
The second quarter net revenues at ST were up 12.7% at $4.33bn with profits of $1.00bn up 15%. The company continued its capital investment in fabs, spending $1bn this quarter for its plants in Agrate, Catania and Crolles.
“Q2 net revenues of $4.33 billion came in above the midpoint of our business outlook range, and Q2 gross margin of 49.0% was in line with guidance,” said Jean-Marc Chery, STMicroelectronics President & CEO.
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“Q2 net revenues increased 12.7% year-over-year. The revenue performance continued to be driven by growth in Automotive and Industrial, partially offset by lower revenues in Personal Electronics,” he said.
“First half net revenues increased 16.1% year-over-year, driven by growth in all product sub-groups except the Analog and MEMS sub-groups. Operating margin was 27.4% and net income was $2.05 billion.”
“Our third quarter business outlook, at the mid-point, is for net revenues of $4.38 billion, increasing year-over-year by 1.2% and increasing sequentially by 1.1%. We will drive the company based on a plan for FY23 revenues of $17.4 billion, plus or minus $150 million, and a gross margin exceeding 48.0%.”
Automotive and power (ADG) sales were up 34% , with microcontrollers (MDG) up 13%. However the Analog, MEMS and Sensors Group (AMS) saw sales fall by 15.7%
One risk factor is that inventory is increasing, up at $3.05 billion, compared to $2.31 billion in the year-ago quarter. Days sales of inventory at quarter-end was 126 days compared to 104 days in the year-ago quarter.
During the quarter, Orio Bellezza, President, Quality, Manufacturing, Technology and Supply Chain, and Member of the Company’s Executive Committee, announced his retirement from the Company. Bellezza will remain Managing Director of the Company’s Italian subsidiary, STMicroelectronics Srl, until the expiration of his mandate as member of its Board of Directors, which will occur following shareholder approval of its 2023 financial statements.
Fabio Gualandris, the Company’s Executive Vice President, Head of Back-End Manufacturing & Technology, and Deputy to Mr. Bellezza, is appointed President, Quality, Manufacturing and Technology. The Company’s Supervisory Board approved the appointment of Gualandris to the Company’s Executive Committee.
ST expects the 2023 third quarter to have a net revenue of $4.38bn, up around 1.1%, and on the path to the $17bn target as the market recovers in the second half.
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