On Wednesday, STMicroelectronics NV STM held its Capital Markets Day in Paris, unveiling its financial vision through 2030. The company reiterated its ambitious $20 billion-plus revenue target and introduced an intermediate financial model for 2027-2028.
The intermediate plan projects revenues of approximately $18 billion, with an operating margin of 22%-24%.
These targets align with STMicroelectronics’ efforts to streamline costs through manufacturing and operational restructuring, enabling substantial savings.
STMicroelectronics outlines these milestones as stepping stones toward its 2030 goals.
CEO Jean-Marc Chery emphasized the company’s commitment to sustainable and profitable growth. STMicroelectronics plans to continue enabling smarter and safer solutions for various industries, enhancing its role in driving sustainable transformation globally. The company’s focus on strategic customer partnerships and innovative technologies underpins this mission.
For 2027-2028, the company anticipates gross margins of 44%-46%, operating margins of 22%-24%, and free cash flow margins of approximately 20%. By 2030, STMicroelectronics expects to exceed $20 billion in revenue, with gross margins nearing 50% and operating margins surpassing 30%.
The company’s cost-saving measures are projected to generate substantial operational efficiencies. Executives indicated the manufacturing reshaping program would deliver high triple-digit million-dollar savings, further bolstering profitability.
Presentations during the event showcased STMicroelectronics’ strategies across key growth areas, including analog, power, MEMS sensors, microcontrollers, and RF products. Speakers also highlighted advancements in technology and manufacturing that support the company’s long-term goals.
STMicroelectronics stock plunged over 50% year-to-date. In the last four quarters, it failed to reach revenue estimates and missed the EPS consensus for the last three quarters. Multiple Wall Street analysts have slashed their price targets on the stock since July 2024.
STMicroelectronics reported third-quarter net revenues of $3.250 billion, down 26.6%, marginally beating the analyst consensus of $3.247 billion.
Analog products, MEMS, and Sensors (AM&S) segment revenue declined 13.3% to $1.185 billion. Power and Discrete products (P&D) segment revenue decreased 18.4% to $807 million. Microcontrollers (MCU) segment revenue fell 43.4% to $829 million. Digital ICs and RF products (D&RF) segment revenue fell 29.7% to $426 million.
Gross margin declined 980 bps to 37.8%. The operating cash flow more than halved to $723 million.
STMicroelectronics expects fourth-quarter revenue of $3.32 billion, which aligns with the consensus.
Price Action: STM stock is down 1.4% at $24.18 at last check Wednesday.
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