STMicroelectronics Q3 Profit Drops 23.9%, Shares Fall 13%
On October 23, STMicroelectronics (ST) released its financial results for the third quarter ending September 27, 2025, revealing weaker-than-expected performance that triggered a 13.26% drop in its share price.
The company reported revenue of $3.187 billion, down 2% year over year and slightly below analysts’ expectations of $3.163 billion. GAAP operating income plunged 53% to $180 million, with a gross margin of 33.2%, a modest decline from the prior year. GAAP net income fell 32.3% to $237 million, and diluted earnings per share dropped 29.7% to $0.26.
On a non-GAAP basis, ST's net income decreased 23.9% to $267 million, with the operating margin slipping from 11.7% to 6.8%. Adjusted diluted EPS also declined 21.6%, from $0.37 to $0.29. The company attributed the profit drop partly to $37 million in asset impairment, restructuring, and cost reduction expenses.
Breaking down performance by segment:
· Analog, Power, MEMS & Sensors (APMS): Revenue grew 7%, mainly driven by imaging products, while operating profit rose 2.1% to $221 million, with a 15.4% margin (down slightly from 16.1%).
· Power & Discrete (P&D): Revenue plunged 34.3%, with operating income slipping to $67 million, and the margin turning negative at -15.6% (versus 12.2% last year).
· Microcontrollers, Digital ICs & RF (MDRF): The Embedded Processing unit grew 8.7%, supported by general-purpose MCUs, with operating profit up 9.4% to $161 million and a margin of 16.5%. However, RF and Optical Communications revenue fell 3.4%, with operating profit down 31.6% to $57 million.
Looking ahead, ST forecasts Q4 revenue of around $3.28 billion, up 2.9% quarter-over-quarter, and expects a gross margin near 35%, including about 290 basis points in underutilization charges. Based on this outlook, full-year 2025 revenue is projected to reach approximately $11.75 billion, representing a 22.4% increase in the second half versus the first, signaling early signs of recovery in the semiconductor market.
