The company’s first quarter revenue fell short of the mid-point of its previous guidance by 5 percent. Success in the sale of imaging and analog chips was offset by weakness in automotive and power semiconductors, ST said.

The company is forecasting a sequential fall in revenue in 2Q20 to $2.0 billion at the mid-point. This represents a highly unseasonal fall of 10.4 percent and is driven by the impact on demand and supply chains of the Covid-19 pandemic. ST said that the revenue for the rest of the year will be in a range from essentially flat with 1H20’s revenue of $4.3 billion to an increase of $1 billion, depending on the global economic impact of the pandemic.

“We will drive the company based on a plan for FY20 revenues between $8.8 billion and $9.5 billion. We plan for growth in the second half over the first half to be in the range of $340 million to $1.04 billion. Growth will be driven by already engaged customer programs and the removal of supply constraints. The growth range is linked to the evolution of the market,” said CEO Jean-Marc Chery, in a statement.

Chery added that ST has cuts its 2020 capital expenditure budget to between $1.0 billion and $1.2 billion from the previous figure of $1.5 billion.

ST’s revenue in the 1Q20 was $2.231 billion up 7.5 percent from $2.076 billion in 1Q19. It was however down an unseasonally large 19 percent from $2.754 billion in 4Q19. ST’s net income was $192 million up 7.9 percent from the profit in the same quarter a year before.

Sales in the Automotive and Discrete Group (ADG) were $753 million, down 16.6 percent year-on-year and reflecting the start of shutdowns that have been implemented across the automotive sector.

ST’s analog, MEMS and sensors business unit enjoyed exceptional annual growth. The unit achieved sales of $852 million. Chery commented: “AMS revenues increased 54.3 percent, on higher imaging and analog sales mainly for personal electronics applications, while MEMS sales were essentially flat.” The sales microcontroller and digital group recorded $623 million of sales, up 1 percent year-on-year.

The company’s net financial position on March 28, 2020 was $668 million, reflecting liquidity of $2.71 billion and debt of $2.04 billion. ST has undrawn credit facilities of $1.1 billion including a €500 million line of credit with the European Investment Bank.

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