STMicroelectronics Q1 Revenue $3.5B, Net Profit -50%

STMicroelectronics (ST) released its financial report for the first quarter of 2024, reporting net revenue of $3.465 billion. This figure represents a decrease of 18.4% compared to the same period last year and 19.1% compared to the previous quarter. Gross profit was $1.444 billion, down 31.6% year over year and 26% quarter over quarter, with a gross margin of 41.7%. Net income for the quarter was $513 million, reflecting a decline of 50.9% year over year and 52.4% quarter over quarter.

The company's quarterly revenue fell short of expectations, mainly due to a slowdown in demand for automotive chips. In response to this weaker demand, ST revised its full-year 2024 revenue forecast downward from a range of $15.9-$16.9 billion to $14-$15 billion. The gross margin is expected to remain stable at around 40%.

ST and the broader semiconductor industry are dealing with weakened demand from the consumer electronics sector, influenced by a slowdown in the smartphone and computer markets. Previously, the automotive sector had been actively seeking smaller, more energy-efficient chips, making the automotive semiconductor market stable. However, this trend has started to shift.

President and CEO Jean-Marc Chery stated that first-quarter net income and gross profit fell below the midpoint of the company's business guidance, primarily due to declines in automotive and industrial revenue. However, increased revenue from personal electronics helped offset the impact. Chery noted that automotive semiconductor demand slowed during the first quarter, contrary to earlier expectations.

Looking ahead to the second quarter, ST projects revenue of $3.2 billion, down 26.0% compared to the same period last year and 7.6% compared to the previous quarter. For the full fiscal year 2024, the company anticipates maintaining net capital expenditures around $2.5 billion.