PR No: C3254C
STMicroelectronics Reports 2024 First Quarter Financial Results
- Q1 net revenues
$3.47 billion ; gross margin 41.7%; operating margin 15.9%; net income$513 million - Q1 free cash flow1
$(134) million after Net Capex1 of$967 million - Business outlook at mid-point: Q2 net revenues of
$3.2 billion and gross margin of 40%
ST reported first quarter net revenues of
- “Q1 net revenues and gross margin both came in below the midpoint of our business outlook range, driven by lower revenues in Automotive and Industrial, partially offset by higher revenues in
Personal Electronics .” - “On a year-over-year basis, Q1 net revenues decreased 18.4%, operating margin decreased to 15.9% from 28.3% and net income decreased 50.9% to
$513 million .” - “During the quarter, Automotive semiconductor demand slowed down compared to our expectations, entering a deceleration phase, while the ongoing Industrial correction accelerated.”
- “Our second quarter business outlook, at the mid-point, is for net revenues of
$3.2 billion , decreasing year-over-year by 26.0% and decreasing sequentially by 7.6%; gross margin is expected to be about 40%.” - “We will now drive the Company based on a revised plan for FY24 revenues in the range of
$14 billion to$15 billion . Within this plan, we expect a gross margin in the low 40’s.” - “We plan to maintain our Net Capex1 plan for FY24 at about
$2.5 billion focusing on our strategic manufacturing initiatives.”
Quarterly Financial Summary (
(US$ m, except per share data) | Q1 2024 | Q4 2023 | Q1 2023 | Q/Q | Y/Y |
Net Revenues | -19.1% | -18.4% | |||
Gross Profit | -26.0% | -31.6% | |||
Gross Margin | 41.7% | 45.5% | 49.7% | -380 bps | -800 bps |
Operating Income | -46.1% | -54.1% | |||
Operating Margin | 15.9% | 23.9% | 28.3% | -800 bps | -1,240 bps |
Net Income | -52.4% | -50.9% | |||
Diluted Earnings Per Share | -52.6% | -50.9% |
First Quarter 2024 Summary Review
Reminder: On
Net Revenues by Reportable Segment (US$ m) | Q1 2024 | Q4 2023 | Q1 2023 | Q/Q | Y/Y |
Analog products, MEMS and Sensors (AM&S) segment | 1,217 | 1,418 | 1,400 | -14.2% | -13.1% |
Power and discrete products (P&D) segment | 820 | 965 | 909 | -15.1% | -9.8% |
Subtotal: Analog, Power & Discrete, | 2,037 | 2,383 | 2,309 | -14.5% | -11.8% |
Microcontrollers (MCU) segment | 950 | 1,272 | 1,448 | -25.3% | -34.4% |
Digital ICs and RF Products (D&RF) segment | 475 | 623 | 486 | -23.8% | -2.1% |
Subtotal: Microcontrollers, Digital ICs and RF products (MDRF) | 1,425 | 1,895 | 1,934 | -24.8% | -26.3% |
Others | 3 | 4 | 4 | - | - |
Total Net Revenues | 3,465 | 4,282 | 4,247 | -19.1% | -18.4% |
Net revenues totaled
Gross profit totaled
Operating income decreased 54.1% to
By reportable segment, compared with the year-ago quarter:
In Analog, Power & Discrete,
Analog products, MEMS and Sensors (AM&S) segment:
- Revenue decreased 13.1% mainly due to a decrease in MEMS and Imaging.
- Operating profit decreased by 44.8% to
$185 million . Operating margin was 15.2% compared to 23.9%.
Power and Discrete products (P&D) segment:
- Revenue decreased 9.8% mainly due to a decrease in Discrete.
- Operating profit decreased by 41.6% to
$138 million . Operating margin was 16.8% compared to 26.0%.
In Microcontrollers, Digital ICs and RF products (MDRF)
Microcontrollers (MCU) segment:
- Revenue decreased 34.4% mainly due to a decrease in GP MCU.
- Operating profit decreased by 66.7% to
$185 million . Operating margin was 19.5% compared to 38.3%.
Digital ICs and RF products (D&RF) segment:
- Revenue decreased 2.1% due to a decrease in ADAS more than offsetting an increase in
RF Communications . - Operating profit decreased by 8.2% to
$150 million . Operating margin was 31.8% compared to 33.9%.
Net income and diluted Earnings Per Share decreased to
Cash Flow and Balance Sheet Highlights
Trailing 12 Months | ||||||
(US$ m) | Q1 2024 | Q4 2023 | Q1 2023 | Q1 2024 | Q1 2023 | TTM Change |
Net cash from operating activities | 859 | 1,480 | 1,320 | 5,531 | 5,577 | -0.8% |
Free cash flow (non- | (134) | 652 | 206 | 1,434 | 1,715 | -16.4% |
Net cash from operating activities was
Net Capex (non-
Free cash flow (non-
Inventory at the end of the first quarter was
In the first quarter, ST paid cash dividends to its stockholders totaling
ST’s net financial position (non-
Business Outlook
ST’s guidance, at the mid-point, for the 2024 second quarter is:
- Net revenues are expected to be
$3.2 billion , a decrease of 7.6% sequentially, plus or minus 350 basis points. - Gross margin of 40%, plus or minus 200 basis points.
- This outlook is based on an assumed effective currency exchange rate of approximately
$1.08 = €1.00 for the 2024 second quarter and includes the impact of existing hedging contracts. - The second quarter will close on
June 29, 2024 .
Conference Call and Webcast Information
ST will conduct a conference call with analysts, investors and reporters to discuss its first quarter 2024 financial results and current business outlook today at
Use of Supplemental Non-
This press release contains supplemental non-
Readers are cautioned that these measures are unaudited and not prepared in accordance with
See the Appendix of this press release for a reconciliation of ST’s non-
Forward-looking Information
Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) that are based on management’s current views and assumptions, and are conditioned upon and also involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated by such statements due to, among other factors:
- changes in global trade policies, including the adoption and expansion of tariffs and trade barriers, that could affect the macro-economic environment and adversely impact the demand for our products;
- uncertain macro-economic and industry trends (such as inflation and fluctuations in supply chains), which may impact production capacity and end-market demand for our products;
- customer demand that differs from projections;
- the ability to design, manufacture and sell innovative products in a rapidly changing technological environment;
- changes in economic, social, public health, labor, political, or infrastructure conditions in the locations where we, our customers, or our suppliers operate, including as a result of macroeconomic or regional events, geopolitical and military conflicts, social unrest, labor actions, or terrorist activities;
- unanticipated events or circumstances, which may impact our ability to execute our plans and/or meet the objectives of our R&D and manufacturing programs, which benefit from public funding;
- financial difficulties with any of our major distributors or significant curtailment of purchases by key customers;
- the loading, product mix, and manufacturing performance of our production facilities and/or our required volume to fulfill capacity reserved with suppliers or third-party manufacturing providers;
- availability and costs of equipment, raw materials, utilities, third-party manufacturing services and technology, or other supplies required by our operations (including increasing costs resulting from inflation);
- the functionalities and performance of our IT systems, which are subject to cybersecurity threats and which support our critical operational activities including manufacturing, finance and sales, and any breaches of our IT systems or those of our customers, suppliers, partners and providers of third-party licensed technology;
- theft, loss, or misuse of personal data about our employees, customers, or other third parties, and breaches of data privacy legislation;
- the impact of intellectual property (“IP”) claims by our competitors or other third parties, and our ability to obtain required licenses on reasonable terms and conditions;
- changes in our overall tax position as a result of changes in tax rules, new or revised legislation, the outcome of tax audits or changes in international tax treaties which may impact our results of operations as well as our ability to accurately estimate tax credits, benefits, deductions and provisions and to realize deferred tax assets;
- variations in the foreign exchange markets and, more particularly, the
U.S. dollar exchange rate as compared to the Euro and the other major currencies we use for our operations; - the outcome of ongoing litigation as well as the impact of any new litigation to which we may become a defendant;
- product liability or warranty claims, claims based on epidemic or delivery failure, or other claims relating to our products, or recalls by our customers for products containing our parts;
- natural events such as severe weather, earthquakes, tsunamis, volcano eruptions or other acts of nature, the effects of climate change, health risks and epidemics or pandemics in locations where we, our customers or our suppliers operate;
- increased regulation and initiatives in our industry, including those concerning climate change and sustainability matters and our goal to become carbon neutral by 2027 on scope 1 and 2 and partially scope 3;
- epidemics or pandemics, which may negatively impact the global economy in a significant manner for an extended period of time, and could also materially adversely affect our business and operating results;
- industry changes resulting from vertical and horizontal consolidation among our suppliers, competitors, and customers; and
- the ability to successfully ramp up new programs that could be impacted by factors beyond our control, including the availability of critical third-party components and performance of subcontractors in line with our expectations.
Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely from the forward-looking statements. Certain forward-looking statements can be identified by the use of forward-looking terminology, such as “believes”, “expects”, “may”, “are expected to”, “should”, “would be”, “seeks” or “anticipates” or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions.
Some of these risk factors are set forth and are discussed in more detail in “Item 3. Key Information — Risk Factors” included in our Annual Report on Form 20-F for the year ended
Unfavorable changes in the above or other factors listed under “Item 3. Key Information — Risk Factors” from time to time in our
About
At ST, we are over 50,000 creators and makers of semiconductor technologies mastering the semiconductor supply chain with state-of-the-art manufacturing facilities. An integrated device manufacturer, we work with more than 200,000 customers and thousands of partners to design and build products, solutions, and ecosystems that address their challenges and opportunities, and the need to support a more sustainable world. Our technologies enable smarter mobility, more efficient power and energy management, and the wide-scale deployment of cloud-connected autonomous things. We are committed to achieving our goal to become carbon neutral on scope 1 and 2 and partially scope 3 by 2027. Further information can be found at www.st.com.
For further information, please contact:
INVESTOR RELATIONS:
Group VP, Investor Relations
Tel: +41 22 929 58 12
celine.berthier@st.com
MEDIA RELATIONS:
Tel: + 33 6 59 16 79 08
alexis.breton@st.com
CONSOLIDATED STATEMENTS OF INCOME | |||
(in millions of | |||
Three months ended | |||
2024 | 2023 | ||
(Unaudited) | (Unaudited) | ||
Net sales | 3,444 | 4,241 | |
Other revenues | 21 | 6 | |
NET REVENUES | 3,465 | 4,247 | |
Cost of sales | (2,021) | (2,137) | |
GROSS PROFIT | 1,444 | 2,110 | |
Selling, general and administrative | (425) | (395) | |
Research and development | (528) | (505) | |
Other income and expenses, net | 60 | (9) | |
Total operating expenses | (893) | (909) | |
OPERATING INCOME | 551 | 1,201 | |
Interest income, net | 59 | 37 | |
Other components of pension benefit costs | (4) | (5) | |
INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTEREST | 606 | 1,233 | |
Income tax expense | (92) | (187) | |
NET INCOME | 514 | 1,046 | |
Net income attributable to noncontrolling interest | (1) | (2) | |
NET INCOME ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS | 513 | 1,044 | |
EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS | 0.57 | 1.16 | |
EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS | 0.54 | 1.10 | |
NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING DILUTED EPS | 942.3 | 945.6 | |
CONSOLIDATED BALANCE SHEETS | |||
As at | |||
In millions of | 2024 | 2023 | 2023 |
(Unaudited) | (Audited) | (Unaudited) | |
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | 3,133 | 3,222 | 3,572 |
Short-term deposits | 1,226 | 1,226 | 106 |
Marketable securities | 1,880 | 1,635 | 841 |
Trade accounts receivable, net | 1,787 | 1,731 | 2,013 |
Inventories | 2,685 | 2,698 | 2,870 |
Other current assets | 1,183 | 1,295 | 962 |
Total current assets | 11,894 | 11,807 | 10,364 |
298 | 303 | 300 | |
Other intangible assets, net | 366 | 367 | 403 |
Property, plant and equipment, net | 10,866 | 10,554 | 8,847 |
Non-current deferred tax assets | 585 | 592 | 582 |
Long-term investments | 22 | 22 | 11 |
Other non-current assets | 942 | 808 | 697 |
13,079 | 12,646 | 10,840 | |
Total assets | 24,973 | 24,453 | 21,204 |
LIABILITIES AND EQUITY | |||
Current liabilities: | |||
Short-term debt | 238 | 217 | 176 |
Trade accounts payable | 1,642 | 1,856 | 2,095 |
Other payables and accrued liabilities | 1,547 | 1,525 | 1,544 |
Dividends payable to stockholders | 6 | 54 | 6 |
Accrued income tax | 133 | 78 | 193 |
Total current liabilities | 3,566 | 3,730 | 4,014 |
Long-term debt | 2,875 | 2,710 | 2,488 |
Post-employment benefit obligations | 372 | 372 | 337 |
Long-term deferred tax liabilities | 49 | 54 | 55 |
Other long-term liabilities | 912 | 735 | 445 |
4,208 | 3,871 | 3,325 | |
Total liabilities | 7,774 | 7,601 | 7,339 |
Commitment and contingencies | |||
Equity | |||
Parent company stockholders' equity | |||
Common stock (preferred stock: 540,000,000 shares authorized, not issued; common stock: | 1,157 | 1,157 | 1,157 |
2,931 | 2,866 | 2,693 | |
Retained earnings | 12,982 | 12,470 | 9,754 |
Accumulated other comprehensive income | 468 | 613 | 546 |
(463) | (377) | (352) | |
Total parent company stockholders' equity | 17,075 | 16,729 | 13,798 |
Noncontrolling interest | 124 | 123 | 67 |
Total equity | 17,199 | 16,852 | 13,865 |
Total liabilities and equity | 24,973 | 24,453 | 21,204 |
SELECTED CASH FLOW DATA | |||
Cash Flow Data (in US$ millions) | Q1 2024 | Q4 2023 | Q1 2023 |
859 | 1,480 | 1,320 | |
(1,254) | (1,610) | (786) | |
308 | 336 | (221) | |
(89) | 211 | 314 | |
Selected Cash Flow Data (in US$ millions) | Q1 2024 | Q4 2023 | Q1 2023 |
Depreciation & amortization | 430 | 414 | 368 |
Net payment for Capital expenditures | (994) | (798) | (1,090) |
Dividends paid to stockholders | (48) | (60) | (54) |
Change in inventories, net | (12) | 219 | (262) |
Appendix
ST
New organization
On
ST moved from three reportable segments (ADG, AMS and MDG) to four reportable segments as follows:
- In Analog, Power & Discrete,
MEMS and Sensors (APMS) Product Group :- Analog products, MEMS and Sensors (AM&S) segment, comprised of ST analog products, MEMS sensors and actuators, and optical sensing solutions.
- Power and Discrete products (P&D) segment comprised of discrete and power transistor products.
In this Press Release, “Analog” refers to ST analog products, “MEMS” to MEMS sensors and actuators and “Imaging” to optical sensing solutions.
- In Microcontrollers, Digital ICs and RF products (MDRF)
Product Group :- Microcontrollers (MCU) segment, comprised of general-purpose and automotive microcontrollers, microprocessors and connected security products (including EEPROM).
- Digital ICs and RF Products (D&RF) segment, comprised of automotive ADAS, infotainment, RF and communications products.
In this Press release, “Auto MCU” refers to Automotive microcontrollers and microprocessors, “GP MCU” to general purpose microcontrollers and microprocessors, “Connected Security” to connected security products (including EEPROM), “ADAS” to automotive ADAS and infotainment, “RF Communications” to RF and communications products.
Prior quarters comparative information has been adjusted accordingly.
(Appendix – continued)
ST
Supplemental Financial Information
Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | |
Net Revenues By Market Channel (%) | |||||
Total OEM | 70% | 70% | 67% | 64% | 64% |
Distribution | 30% | 30% | 33% | 36% | 36% |
€/$ Effective Rate | 1.09 | 1.08 | 1.09 | 1.08 | 1.06 |
Reportable Segment Data (US$ m) | |||||
Analog products, MEMS and Sensors (AM&S) segment | |||||
- Net Revenues | 1,217 | 1,418 | 1,367 | 1,293 | 1,400 |
- Operating Income | 185 | 300 | 298 | 259 | 334 |
Power and Discrete products (P&D) segment | |||||
- Net Revenues | 820 | 965 | 989 | 989 | 909 |
- Operating Income | 138 | 245 | 262 | 262 | 236 |
Subtotal: Analog, Power & Discrete, | |||||
- Net Revenues | 2,037 | 2,383 | 2,356 | 2,282 | 2,309 |
- Operating Income | 323 | 545 | 560 | 521 | 570 |
Microcontrollers (MCU) segment | |||||
- Net Revenues | 950 | 1,272 | 1,466 | 1,482 | 1,448 |
- Operating Income | 185 | 378 | 534 | 551 | 555 |
Digital ICs and RF Products (D&RF) segment | |||||
- Net Revenues | 475 | 623 | 605 | 558 | 486 |
- Operating Income | 150 | 223 | 226 | 196 | 165 |
Subtotal: Microcontrollers, Digital ICs and RF products (MDRF) | |||||
- Net Revenues | 1,425 | 1,895 | 2,071 | 2,040 | 1,934 |
- Operating Income | 335 | 601 | 760 | 747 | 720 |
Others (a) | |||||
- Net Revenues | 3 | 4 | 4 | 4 | 4 |
- Operating Income (Loss) | (107) | (123) | (79) | (122) | (89) |
Total | |||||
- Net Revenues | 3,465 | 4,282 | 4,431 | 4,326 | 4,247 |
- Operating Income | 551 | 1,023 | 1,241 | 1,146 | 1,201 |
(a) Net revenues of Others include revenues from sales assembly services and other revenues. Operating income (loss) of Others include items such as unused capacity charges, including incidents leading to power outage, impairment and restructuring charges, management reorganization costs, start-up and phase out costs, and other unallocated income (expenses) such as: strategic or special research and development programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to reportable segments, as well as operating earnings of other products. Others includes:
(US$ m) | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 |
Unused capacity charges | 63 | 57 | 46 | 15 | 1 |
(Appendix – continued)
ST
Supplemental Non-
The supplemental non-
ST believes that these non-
Net Financial Position and Adjusted Net Financial Position (non-
Net Financial Position, a non-
ST believes its Net Financial Position and Adjusted Net Financial Position provide useful information for investors and management because they give evidence of our global position either in terms of net indebtedness or net cash by measuring our capital resources based on cash and cash equivalents, restricted cash, if any, short-term deposits and marketable securities and the total level of our financial debt. Our definitions of Net Financial Position and Adjusted Net Financial Position may differ from definitions used by other companies, and therefore, comparability may be limited.
(US$ m) | Mar 30 2024 | ||||
Cash and cash equivalents | 3,133 | 3,222 | 3,011 | 3,111 | 3,572 |
Short term deposits | 1,226 | 1,226 | 506 | 106 | 106 |
Marketable securities | 1,880 | 1,635 | 1,537 | 1,346 | 841 |
Total liquidity | 6,239 | 6,083 | 5,054 | 4,563 | 4,519 |
Short-term debt | (238) | (217) | (173) | (176) | (176) |
Long-term debt (a) | (2,875) | (2,710) | (2,418) | (2,473) | (2,488) |
Total financial debt | (3,113) | (2,927) | (2,591) | (2,649) | (2,664) |
Net Financial Position | 3,126 | 3,156 | 2,463 | 1,914 | 1,855 |
Advances from capital grants | (351) | (152) | - | - | - |
Adjusted Net Financial Position | 2,775 | 3,004 | 2,463 | 1,914 | 1,855 |
(a) Long-term debt contains standard conditions but does not impose minimum financial ratios. Committed credit facilities for $693 million equivalent, are currently undrawn.
(Appendix – continued)
Net Capex and Free Cash Flow (non-
Starting Q1 2024, ST presents Net Capex as a non-
Net Capex, a non-
ST believes Net Capex provides useful information for investors and management because annual capital expenditures budget includes the effect of capital grants. Our definition of Net Capex may differ from definitions used by other companies.
(US$ m) | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 |
Payment for purchase of tangible assets, as reported | (1,145) | (1,076) | (1,158) | (1,111) | (1,095) |
Proceeds from sale of tangible assets, as reported | 2 | - | 1 | 5 | 1 |
Proceeds from capital grants and other contributions, as reported | 149 | 278 | 5 | 34 | 4 |
Advances from capital grants allocated to property, plant and equipment | 27 | - | - | - | - |
Net Capex | (967) | (798) | (1,152) | (1,072) | (1,090) |
Free Cash Flow, which is a non-
ST believes Free Cash Flow provides useful information for investors and management because it measures our capacity to generate cash from our operating and investing activities to sustain our operations.
Free Cash Flow reconciles with the total cash flow and the net cash increase (decrease) by including the payment for purchases of (and proceeds from matured) marketable securities and net investment in (and proceeds from) short-term deposits, the net cash from (used in) financing activities and the effect of changes in exchange rates and by excluding the advances from capital grants received on prior periods allocated to property, plant and equipment. Our definition of Free Cash Flow may differ from definitions used by other companies.
(US$ m) | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 |
Net cash from operating activities | 859 | 1,480 | 1,881 | 1,311 | 1,320 |
Net Capex | (967) | (798) | (1,152) | (1,072) | (1,090) |
Payment for purchase of intangible assets, net of proceeds from sale | (26) | (28) | (22) | (22) | (24) |
Payment for purchase of financial assets, net of proceeds from sale | - | (2) | - | (8) | - |
Free Cash Flow | (134) | 652 | 707 | 209 | 206 |
1 Non-
Attachment
- C3254C - Q124 Earnings PR
Source:
2024 GlobeNewswire, Inc., source