STMicroelectronics Q1 Earnings Down, But Tops Market; Warns On Q2; Confirms Annual Cost Savings View

(RTTNews) - STMicroelectronics N.V. (STM), a semiconductor company, Thursday reported sharply lower profit in its first quarter with weak revenues. Adjusted earnings, however, beat market estimates, while revenues matched their view.

Looking ahead, for the second quarter the company expects, at the mid-point, net revenues of $2.71 billion, decreasing year-over-year by 16.2 percent and increasing sequentially by 7.7 percent.

Gross margin is expected to be about 33.4 percent, plus or minus 200 basis points, impacted by about 420 basis points of unused capacity charges.

Jean-Marc Chery, ST President & CEO, said, "While we see Q1 2025 as the bottom, in the current uncertain environment we are focusing on what we can control: keep on innovating to continuously improve and accelerate the competitiveness of our product and technology portfolio, focus on advanced manufacturing and tightly manage our costs. In this respect our company-wide program to reshape ST manufacturing footprint and resize our global cost base is on track and we confirm the annual cost savings target in the high triple-digit million-dollar range exiting 2027."

In the first quarter, net income plunged 89.1 percent to $56 million from $513 million last year. Earnings per share fell 88.9 percent to $0.06 from $0.54 last year.

Adjusted net income was $63 million or $0.07 per share for the latest quarter.

The Wall Street analysts on average expected the company to report earnings of $0.05 per share. Analysts' estimates typically exclude special items.

Operating margin decreased to 0.1 percent from 15.9 percent a year ago.

Net revenues for the quarter fell 27.3 percent to $2.52 billion from last year's $3.47 billion. The Street expected revenues of $2.52 billion.

The company noted that the first-quarter net revenues came in line with the midpoint of business outlook range, driven by higher revenues in Personal Electronics offset by lower-than-expected revenues in Automotive and Industrial.

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