Nearly three and a half billion dollars in revenues. This is the data recorded by the multinational StMicroelectronics based in Agrate Brianza, in decline compared to the previous year’s data. The leading global semiconductor company with customers across all electronics application sectors, today reported US GAAP financial results for the first quarter ended March 30, 2024. For January through March 2024, ST reported net revenue of 3.47 billion, gross margin at 41.7%, operating margin at 15.9% and net income of $513 million or $0.54 per share after dilution.
“First quarter net revenue and gross margin were both below the midpoint of our business guidance, driven by lower revenue in the Automotive and Industrial segments, partially offset by higher revenue in Personal Electronics,” commented Jean-Marc Chery. , President & CEO of ST. “Year over year, first quarter net revenue fell 18.4%, operating margin fell to 15.9% from 28.3%, and net income shrank 50.9% to $513 million of dollars.”
“During the quarter, the demand for semiconductors in the Automotive sector slowed compared to our expectations, entering a phase of deceleration, while the correction already underway in the Industrial sector accelerated” he added, explaining the trend of the market and the ‘activity.
Forecasts
“Regarding ST’s business forecast for the second quarter, we expect, as interim values, net revenues of $3.2 billion, corresponding to a year-over-year decrease of 26% and a decrease of 7.6% compared to to the previous quarter; gross margin is expected to be around 40%. We will now guide the Company based on a revised 2024 revenue plan of between $14 billion and $15 billion. Under this plan, we expect a low 40’s gross margin.”
“We expect to maintain our 2024 net capital expenditure plan at approximately $2.5 billion as we focus on our strategic manufacturing initiatives,” he concluded.
The numbers
In the first quarter, net cash from operating activities was $859 million, compared to $1.32 billion in the same quarter of 2023. In the first quarter, net capital expenditures (non-US GAAP)1 amounted to to $967 million, compared to $1.09 billion in the same quarter last year. In the same period, free cash flow (non-US GAAP) was negative $134 million, compared to a positive value of $206 million in the same quarter of 2023. At the end of the first quarter, inventories were equal to 2, $69 billion, compared to $2.70 billion in the previous quarter and $2.87 billion in the same quarter last year. Inventory turnover was 122 days at the end of the quarter, compared to 104 days in the previous quarter and 122 days in the same quarter of 2023. In the first quarter, ST distributed cash dividends to its shareholders totaling 48 million dollars and repurchased $87 million of its own shares under the ongoing stock buy-back program.
As of March 30, 2024, ST’s net financial position (non-US GAAP)1 was $3.13 billion compared to $3.16 billion as of December 31, 2023, reflecting total liquidity of $6.24 billion dollars and a total financial debt of 3.11 billion dollars. As of March 30, 2024, the adjusted net financial position (non-US GAAP parameter)1, taking into account the effect on total liquidity of advances on capital contributions against capital expenditure not yet incurred, was equal to 2, 78 billion dollars. ST’s guidance for the second quarter of 2024, at midpoints, is for expected net revenues of $3.2 billion, representing a decrease of 7.6% sequentially, plus or minus 350 basis points with gross margin of 40%, plus or minus 200 basis points with a forecast based on an assumed effective exchange rate of approximately $1.08 = €1.00 for the second quarter of 2024 and includes the impact of existing hedging contracts.
