On Thursday, STMicroelectronics (NYSE:STM) reported first-quarter 2025 results.
The company’s quarterly net revenues of $2.52 billion represented a 27.3% year-over-year decline, beating the analyst consensus estimate of $2.51 billion. EPS of $0.06 beat the analyst consensus estimate of $0.04.
Sales to OEMs dropped by 25.7%, and Distribution sales fell by 31.2%.
The revenue of the Analog Products, MEMS, and Sensors (AM&S) segment declined 23.9% to $1.07 billion, mainly due to a decrease in Analog.
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Power and Discrete products (P&D) segment revenue decreased 37.1% to $397 million.
The Embedded Processing (EMP) segment revenue decreased 29.1% to $742 million due to a decrease in GPAM. RF & Optical Communications (RF&OC) segment revenue decreased 19.2% to $306 million.
The quarterly book-to-bill ratio improved, with both automotive and industrial being above parity.
Gross margin contracted 830 bps year over year to 33.4% owing to product mix, sales price, and higher unused capacity charges. Operating margin fell 1,580 bps to 0.1% in the quarter.
STMicroelectronics’ quarterly operating cash flow was $574 million (compared to $859 million in the year-ago quarter), and free cash flow was $30 million (compared to negative $134 million in the year-ago quarter).
STMicroelectronics’ net financial position was $3.08 billion as of March 31, compared to $3.23 billion as of December 31, with total liquidity of $5.96 billion and total financial debt of $2.88 billion.
CEO Jean-Marc Chery described Q1 as the bottom, noting the company will focus on innovation, advanced manufacturing, and cost management.
Outlook: STMicroelectronics expects, at the mid-point, fiscal second-quarter net revenues to be $2.71 billion (2.615 billion-$2.805 billion range), an increase of 7.7% sequentially, plus or minus 350 basis points versus $2.62 billion consensus estimate, and a gross margin of 33.4%, plus or minus 200 bps.
It plans to maintain its net capex plan for 2025 of $2.0 billion—$2.3 billion, mainly to execute the reshaping of its manufacturing footprint.
It confirmed the annual cost savings target in the high triple-digit million-dollar range exiting 2027.
Price Action: STM stock traded higher by 6.84% to $23.27 premarket at the last check on Thursday.
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