ST provides strong Q3 results but macroeconomics weigh
European chipmaker STMicroelectronics produced strong 3Q22 results lifted by the firm’s exposure to automotive and industrial markets. But the company’s share price fell 8 percent mainly on the 2023 outlook.
The company’s 3Q22 revenue was $4.32 billion up 12.2 percent sequentially and up 35.2 percent from $3.20 billion in 3Q21 and ahead of analysts’ expectations. The outlook for 4Q22 is $4.40 billion, increasing year-over-year by 23.7 percent and this would result in full year 2022 net revenues of about $16.10 billion, representing a 26.2 percent year-over-year growth.
ST confirmed capital expenditure of between $3.4 and $3.6 billion for the year.
Sales were balanced between ST’s three business units. The Automotive and Discrete Group (ADG) and Microcontrollers and Digital ICs Group (MDG) outperformed the Analog, MEMS and Sensors Group (AMS).
This reflected the former groups’ exposure to the relatively strong automotive and industrial markets and MEMS exposure to the personal electronics. ADG achieved sales of $1.56 billion up 55.5 percent year-on-year. MDG sales were $1.37 billion up 47.7 percent. AMS sales were $1.38 billion up 9.7 percent over a year before.
Nonetheless ST’s share price fell mainly on the outlook for 2023.
In a conference call with analysts Jean-Marc Chery, CEO of STMicroelectronics, presented a relatively upbeat for 2023 pointing out that more electric vehicles were expected to be produced – 10 million up from 7 million in 2021 – and that such vehicles have 4x to 5x more semiconductors than combustion engine vehicles. Chery also made the point that in industrial sector although demand may be challenged a number of organizations continue to drive investment in productivity through automation, robotics, AI and similar developments.
Over the two years ST and other semiconductor companies have been able to ramp prices significantly. Going forward ST said that it expects prices to be stable in 4Q22 and into 2023.
CEO Chery re-affirmed that ST’s medium-term target is for $20 billion annual revenue to be achieved in 2025, 2026 or 2027.
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