Auto Sales Q4 Growth For STMicroelectronics More Than Offset By Sensors Decline, Expects To Spill Over In Q1

STMicroelectronics NV (NYSE: STM) reported fiscal fourth-quarter 2023 revenue decline of 3.2% year-on-year to $4.28 billion, missing the consensus of $4.31 billion. EPS of $1.14 beat the consensus of $0.95.

Sales to OEMs decreased by 0.4% Y/Y, and Distribution sales fell by 9.2% Y/Y.

Automotive and Discrete Group (ADG) revenue rose 21.5% Y/Y to $2.06 billion. Analog, MEMS, and Sensors Group (AMS) revenue fell by 25.8% Y/Y to $993 million. Microcontrollers and Digital ICs Group (MDG) revenue decreased 11.5% Y/Y to $1.23 billion. 

Margins: The gross margin declined by 200 bps to 45.5% due to higher input manufacturing costs and unused capacity charges. The operating margin decreased by 520 bps to 23.9%.

STMicroelectronics generated $652 million in free cash flow and held $6.08 billion in cash and equivalents.

Jean-Marc Chery, ST President & CEO, commented: “In Q4, ST delivered revenues and gross margin slightly below the mid-point of the guidance, with higher revenues in Personal Electronics offset by a softer growth rate in Automotive.” 

“In Q4, our customer order bookings decreased compared to Q3. We continued to see stable end-demand in Automotive, no significant increase in Personal Electronics, and further deterioration in Industrial.”

Outlook: STMicroelectronics expects fiscal first quarter 2024 revenue of $3.60 billion, a decrease of about 15.9% sequentially, plus or minus 350 bps (consensus $4.06 billion). The company expects a gross margin of 42.3%, plus or minus 200 bps.

It expects fiscal 2024 revenue of $15.9 billion – $16.9 billion (versus consensus of $17.31 billion) and a gross margin in the low to mid-40%.

For 2024, the company plans to invest about $2.5 billion in net Capex. Capital expenditures were $798 million in the fourth quarter and $4.11 billion for the full year 2023.

Price Action: STM shares are trading lower by 2.22% at $44.94 premarket on the last check Thursday.