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.
Also Read: STMicroelectronics Faces Leadership Shakeup, Italy Seeks New CEO Amid Semiconductor Struggles
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.
Read Next:
Photo by Michael Vi via Shutterstock
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.