Semiconductor Player STMicroelectronics Tops Q3 Expectations But Revises Annual Outlook: Details

STMicroelectronics NV (NYSE: STM) reported third-quarter FY23 revenue growth of 2.5% year-on-year to $4.43 billion, beating the consensus of $4.38 billion. EPS of $1.16 beat the consensus of $1.09.

Sales to OEMs increased by 2.1% Y/Y, and Distribution sales improved by 3.4% Y/Y.

Automotive and Discrete Group (ADG) revenue rose 29.6% Y/Y to $2.03 billion. Analog, MEMS, and Sensors Group (AMS) revenue changed by (28.3)% Y/Y to $990 million. Microcontrollers and Digital ICs Group (MDG) revenue grew 2.8% Y/Y to $1.41 billion. 

Margins: The gross margin remained stable at 47.6%. Improved product mix drove the margin. The operating margin declined by 140 bps to 28.0%.

STMicroelectronics generated $707 million in free cash flow and held $5.05 billion in cash and equivalents.

Outlook: STMicroelectronics sees Q4 revenue of $4.30 billion, a decrease of about 3% sequentially, plus or minus 350 bps (consensus $4.4 billion).

The company expects a Q4 gross margin of 46%, plus or minus 200 bps.

STMicroelectronics revised its FY23 revenues outlook to $17.3 billion, versus the prior $17.25 billion - $17.55 billion (consensus $17.36 billion) and a gross margin of 48.1%.

Price Action: STM shares traded higher by 3.49% at $40.35 premarket on the last check Thursday.