STMicroelectronics
Sales up by almost 13 percent compared to previous year
STMicroelectronics reported second quarter net revenues of $4.33 billion, gross margin of 49.0%, operating margin of 26.5%, and net income of $1.00 billion or $1.06 diluted earnings per share.
Jean-Marc Chery, STMicroelectronics President & CEO, commented: »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.« And further: »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.”
On a year-over-year basis, gross margin increased to 49.0% from 47.4%, operating margin increased to 26.5% from 26.2% and net income increased 15.5% to $1.00 billion. According to Chery, 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.
Regarding the different product groups, ST explains, that on a year-over-year basis, ADG and MDG revenues increased 34.4% and 13.0%, respectively, while AMS decreased 15.7%. Year-over-year net sales to OEMs and Distribution increased 9.8% and 18.3%, respectively. On a sequential basis, net revenues increased 1.9%, 110 basis points better than the mid-point of the Company’s guidance. ADG and MDG both reported an increase in net revenues on a sequential basis, while AMS decreased, as expected.
Gross profit totaled $2.12 billion, representing a year-over-year increase of 16.5%. Gross margin of 49.0% increased 160 basis points year-over-year, mainly due to product mix, favorable pricing, positive currency effects, net of hedging, partially offset by higher manufacturing costs.
Operating income increased 14.2% to $1.15 billion, compared to $1.00 billion in the year-ago quarter. In the second quarter 2023, net operating expenses included negative non-recurring non-cash items amounting to $34 million. The Company’s operating margin increased 30 basis points on a year-over-year basis to 26.5% of net revenues, compared to 26.2% in the 2022 second quarter.
By product group, compared with the year-ago quarter:
- Automotive and Discrete Group (ADG): Revenue increased for both Automotive and Power Discrete. Operating profit increased by 73.8% to $624 million. Operating margin was 31.9% compared to 24.7%.
- Analog, MEMS and Sensors Group (AMS): Revenue decreased in Analog, in Imaging and in MEMS. Operating profit decreased by 48.3% to $139 million. Operating margin was 14.8% compared to 24.1%.
- Microcontrollers and Digital ICs Group (MDG): Revenue increased for both Microcontrollers and RF Communications. Operating profit increased by 19.0% to $505 million. Operating margin was 35.4% compared to 33.6%.
Business Outlook
- The Company’s guidance, at the mid-point, for the 2023 third quarter is:
- Net revenues are expected to be $4.38 billion, an increase of 1.1% sequentially, plus or minus 350 basis points.
- Gross margin of 47.5%, plus or minus 200 basis points.
