STMicroelectronics Reports Q2 2018 Financial Results

PR No: C2855C

 

STMicroelectronics Reports Q2 2018 Financial Results

  • Q2 net revenues $2.27 billion (up 18.0% Y/Y), operating margin 12.7%, net income $261 million
  • Q2 Y/Y revenue performance balanced across product groups, regions and end markets
  • Q3 business outlook at mid-point: net revenues up about 10.0% Q/Q, gross margin about 40.0%

Geneva, July 25, 2018 - STMicroelectronics (NYSE: STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported U.S. GAAP financial results for the second quarter ended June 30, 2018. In addition, this press release contains non-U.S. GAAP measures (see Appendix for additional information).

Second quarter net revenues and gross margin were above the mid-point of the Company's outlook.  ST reported second quarter net revenues of $2.27 billion, gross margin of 40.2%, operating margin of 12.7%, and net income of $261 million or $0.29 diluted earnings per share.

Jean-Marc Chery, STMicroelectronics President & CEO, made the following comments:

  • "ST had another quarter of double-digit, year-over-year revenue growth, with improved performance across key financial metrics. We are on track with the goal set at our Capital Markets Day to grow year-over-year 2018 revenues between about 14% to 17%.
  • "Revenue increased 18% year-over-year on balanced growth across all product groups, regions and end markets, with an especially strong performance in Industrial.
  • "Operating income and net income were up sharply year-over-year, increasing respectively about 60% and 73%.
  • "ST's third quarter outlook is for revenues to grow sequentially about 10.0%, reflecting year-over-year growth of 16.8%, and gross margin to be about 40.0%. This is driven by continued healthy demand in our end markets and, as anticipated, by growth in smartphone applications."

Financial Summary (U.S. GAAP)(1)

($ in millions except earnings per share) Q2 2018 Q1 2018 Q2 2017 Y/Y Q/Q
Net Revenues $2,269 $2,226 $1,923 18.0% 1.9%
Gross Margin 40.2% 39.9% 38.3% 190 bps 30 bps
Operating Income $289 $269 $181 59.7% 7.4%
Operating Margin 12.7% 12.1% 9.4% 330 bps 60 bps
Net Income $261 $239 $151 72.8% 9.2%
Diluted Earnings Per Share $0.29 $0.26 $0.17 70.6% 11.5%

 (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.

Second Quarter 2018 Summary Review

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.

Net Revenues By Product Group

(in US$ millions)
Q2 2018 Q1 2018 Q2 2017 Y/Y Q/Q
Automotive and Discrete Group (ADG) $870 $817 $755 15.2% 6.5%
Analog, MEMS and Sensors Group (AMS) 613 655 553 10.7 (6.4)
Microcontrollers and Digital ICs Group (MDG) 782 750 612 27.8 4.3
Others 4 4 3 24.1 5.9
Total Net Revenues $2,269 $2,226 $1,923 18.0% 1.9%

Net revenues increased 1.9% sequentially, 40 basis points better than the mid-point of the Company's guidance. On a year-over-year basis, second quarter net revenues increased 18.0% with all product groups delivering double-digit revenue growth. Year-over-year sales to OEMs and Distribution were up 9.8% and 33.4%, respectively.

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