STMicroelectronics N.V. (STM) Tops Q4 EPS by 6c, Revenues Beat; Offers Q1 Revenue Guidance Above Consensus

STMicroelectronics N.V. (NYSE: STM) reported Q4 EPS of $0.43, $0.06 better than the analyst estimate of $0.37. Revenue for the quarter came in at $2.75 billion versus the consensus estimate of $2.68 billion.

• Q4 net revenues $2.75 billion; gross margin 39.3%; operating margin 16.7%; net income $392 million
• FY net revenues $9.56 billion; gross margin 38.7%; operating margin 12.6%; net income $1,032 million
• Business outlook at mid-point: Q1 net revenues of $2.36 billion and gross margin of 38.0%

Jean-Marc Chery, STMicroelectronics President & CEO, commented:

• “We closed 2019 with a solid fourth quarter sales and financial performance. Net revenues grew 7.9% sequentially, above the mid-point of our guidance of 5.0%, with all product groups contributing to the growth. Our gross margin was 39.3%, 110 basis points higher than the mid-point of our guidance, mainly due to better than expected manufacturing efficiencies and improved product mix. On a sequential basis, our operating margin was up 360 basis points to 16.7% and free cash flow increased to $461 million in the fourth quarter.
• “Our 2019 financial performance, with net revenues of $9.56 billion and an operating margin of 12.6%, is aligned with the full year expectations we provided in April 2019.
• “ST’s first quarter outlook, at the mid-point, is for net revenues of $2.36 billion, increasing year-over-year by 13.7% and decreasing sequentially by 14.3%; gross margin is expected to be 38.0%, including about 80 basis points of unsaturation charges.
• “For 2020, we plan to invest about $1.5 billion in CAPEX to support our strategic initiatives and revenue growth to progress towards our mid-term revenue ambition of $12 billion.”

GUIDANCE:

STMicroelectronics N.V. sees Q1 2020 revenue of $2.36 billion, versus the consensus of $2.25 billion.

The Company’s guidance, at the mid-point, for the 2020 first quarter is:

• Net revenues are expected to be $2.36 billion, a decrease of 14.3% sequentially, plus or minus 350 basis points;
• Gross margin of 38.0%, plus or minus 200 basis points;
• This outlook is based on an assumed effective currency exchange rate of approximately $1.12 = €1.00 for the 2020 first quarter and includes the impact of existing hedging contracts;
• The first quarter will close on March 28, 2020.

For earnings history and earnings-related data on STMicroelectronics N.V. (STM) click here.

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