STMicroelectronics Reports 2018 First Quarter Financial Results

PR No. C2848C

STMicroelectronics Reports 2018 First Quarter Financial Results

  • Net revenues of $2.23 billion, up 22.2% year-over-year
  • Gross and operating margins up significantly year-over-year to 39.9% and 12.1%, respectively
  • Net income of $239 million, year-over-year improvement of $131 million
  • Cash dividend of $0.24 per common share payable in equal quarterly installments proposed to the 2018 Annual General Meeting of Shareholders

Geneva, April 25, 2018 - STMicroelectronics (NYSE: STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported financial results for the first quarter ended March 31, 2018.

First quarter net revenues totaled $2.23 billion, gross margin was 39.9%, and net income was $239 million or $0.26 diluted earnings per share.

"We started 2018 with another quarter of double-digit, year-over-year sales growth across all product groups and regions," commented Carlo Bozotti, STMicroelectronics President and Chief Executive Officer.

"On a sequential basis, first quarter results were better than the mid-point of our sales and gross margin guidance. We delivered a better than seasonal performance in Automotive and Industrial, thanks to our application-focused approach on Smart Driving and Internet of Things, despite the anticipated unfavorable seasonal dynamics for smartphone applications.

"On a year-over-year basis, net revenues grew 22.2%, gross margin expanded by 220 basis points to 39.9% and operating margin increased by 480 basis points to 12.1%. Free cash flow, during a quarter of high capital spending to support our growth plans, increased by 53% to $95 million from the year-ago quarter and we exited the quarter with a solid net financial position of $522 million."

Financial Summary (US$ Million)

U.S. GAAP (1) Q1 2018 Q4 2017 Q1 2017
Net Revenues 2,226 2,466 1,821
Gross Margin 39.9% 40.7% 37.7%
Operating Income 269 411 132
Net Income attributable to parent company 239 308 108
Net cash from operating activities 455 587 289


Non-U.S. GAAP (2) Q1 2018 Q4 2017 Q1 2017
Free cash flow 95 145 62
Net financial position 522 489 518

 (1) Certain amounts in the prior periods have been adjusted to reflect the January 1, 2018 adoption of ASU 2017-07 related to the reclassification of certain pension costs.

(2) Non-U.S. GAAP measure. See Appendix for reconciliation to U.S. GAAP and additional information explaining why the Company believes these measures are important.

Financial Summary by Product Group (US$ Million)

Net Revenues By Product Group Q1 2018 Q4 2017 Q1 2017
Automotive and Discrete Group (ADG) 817 821 708
Analog, MEMS and Sensors Group (AMS) (a) 655 902 518
Microcontrollers and Digital ICs Group (MDG) 750 740 593
Others (b) 4 3 2
Total 2,226 2,466 1,821

(a)  Effective January 1, 2018, the Subsystems business unit was transferred from Others to Analog, MEMS and Sensors Group (AMS). Prior periods have been restated accordingly.
(b)  Net revenues of Others includes revenues from sales of assembly services and other revenues.

First Quarter Review

First quarter net revenues decreased 9.8% sequentially, 20 basis points better than the midpoint of the Company's guidance. On a sequential basis, Microcontrollers and Digital ICs Group (MDG) revenues increased 1.3% and Automotive and Discrete Group (ADG) revenues decreased 0.5% reflecting better than seasonal performance for Smart Driving and Internet of Things applications. Analog, MEMS and Sensors Group (AMS) revenues decreased by 27.4% principally reflecting unfavorable seasonal dynamics for smartphone applications negatively impacting the Company's Imaging business.

On a year-over-year basis, first quarter net revenues increased 22.2% with all product groups delivering double-digits revenue growth. Specifically, Microcontrollers and Digital ICs Group (MDG) revenues were up 26.6% largely driven by a strong expansion of microcontroller sales; Analog, MEMS and Sensors Group (AMS) revenues increased 26.5% on sharply higher Imaging sales, as well as growth in Analog and MEMS; and Automotive and Discrete Group (ADG) revenues were higher by 15.4% on double-digit growth for both Automotive and Power Discrete products.

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