ST raises forecasts after bumper Q2
The results exceeded analysts’ expectations and were attributed to strong global demand, in particular from automotive and mobile phone customers. As a result of the good second quarter ST raised the estimate for the full year from $12.1 billion to $12.5 billion and raised the capex budget to $2.1 billion from $2.0 billion.
The second quarter sales were $2.99 billion, up 43.4 percent on the same quarter a year before, although flat with the 1Q21. The company made a net income of $412 million, up from just $90 million in the 2Q20. ST was one of the companies that reportedly raised prices at the beginning of 2021 in response to the chip shortage (Report: Chipmakers raising prices 10 to 20 percent).
“First half net revenues increased 39.1 percent year-over-year, driven by growth in all product groups, except the RF Communications sub-group. Operating margin was 15.5 percent and net income $776 million,” said Jean-Marc Chery, CEO of STMicroelectronics, in a statement.
In terms of ST’s three business groups, it was the analog, mixed-signal and sensors group that performed best with sales up 62.3 percent compared with a year before. The automotive and discrete group followed with a 48.2 percent annual uplift. The microcontrollers and digital group still enjoyed a rise of 22.3 percent. The AMS group is highly seasonal and is probably enjoying a ramping of sales for a round of smartphone introductions in the fall.
The forecast for the third quarter was set at $3.20 billion, which would produce a year-over-year increase of 20.0 percent.
“We will now drive the company based on a plan for FY21 revenues of $12.5 billion, plus or minus $100 million, a year-over-year increase of 22.3 percent at the mid-point. This growth is expected to be driven by strong dynamics in all the end markets we address and our engaged customer programs. Our capex plan will now be about $2.1 billion for 2021, said Chery.
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