Legacy Operations Rebound and AI Business Expansion Drive STMicroelectronics' Strong Q1 Results and Upbeat Forecast

Stock News15:04

STMicroelectronics NV reported first-quarter earnings that surpassed expectations on Thursday and projected further growth in the second quarter. The company's Q1 revenue increased by 23% year-over-year to $3.1 billion, exceeding analysts' estimates of $3.04 billion. Non-GAAP operating profit reached $171 million, also beating the consensus forecast of $165.8 million.

By business segment, revenue from the Analog, Power & Discrete, MEMS, and Sensors (APMS) product group rose 16.4% to $1.707 billion. The Microcontroller, Digital ICs, and RF (MDRF) product group saw revenue grow 32.1% to $1.384 billion.

The company forecast second-quarter revenue of approximately $3.45 billion, representing sequential growth of 11.6% and a year-over-year increase of 24.9%, above market expectations of $3.21 billion.

STMicroelectronics, one of Europe's largest chipmakers and a bellwether in the automotive and industrial semiconductor sectors, has seen customers gradually reduce excess inventory accumulated after the pandemic while cutting new orders in recent years.

Jean-Marc Chery, President and CEO of STMicroelectronics, stated, "Excluding revenue contribution from the acquisition of NXP's MEMS sensor business, Q1 net revenue came in above the mid-point of our guidance range, primarily driven by revenue growth from customer engagement programs in personal electronics, communication equipment, and computer peripherals. Gross margin also exceeded the mid-point of our guidance, mainly due to a more favorable product mix."

He added, "In the first quarter, despite macroeconomic uncertainty, we observed improved demand, strong bookings, and a return to normalized inventory levels in the distribution channel."

Chery also noted, "STMicroelectronics is now strategically positioned to benefit from new AI-driven projects, leveraging our specialized expertise to support the evolving AI infrastructure. The company confirms that data center business revenue will significantly exceed $500 million by 2026 and will be well above $1 billion by 2027."

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment