STMicroelectronics Shares Fall After Guidance Disappoints
26 Ottobre 2023 - 10:31AM
Dow Jones News
By Mauro Orru
STMicroelectronics shares fell Thursday after the European chip
maker set guidance below analysts' expectations for the fourth
quarter and slightly tweaked its forecasts for the year.
At 0755 GMT, STMicroelectronics shares traded 1.7% lower at
EUR36.50.
The group is targeting net revenue of $4.30 billion and a gross
margin of 46% in the current quarter. Citi analysts pointed out in
a research note that STMicroelectronics' forecasts are below
Visible Alpha consensus of $4.41 billion on revenue and 46.6% on
the gross margin.
"Bears may argue this is just the beginning of a crack in ST's
fundamentals," they said.
European chip makers have been grappling for months with slowing
demand for semiconductors on products such as computers and
smartphones. Jochen Hanebeck, chief executive of Germany's Infineon
Technologies, said in August that demand from the automotive market
remained high, unlike sales for chips on personal electronics
devices.
"We believe ST is continuing to see high demand across
automotive and industrial verticals, as per comments from peers,"
Citi analysts said.
STMicroelectronics posted net revenue of $4.43 billion for the
third quarter, up 2.5% on the year. The company's automotive
business contributed $2.03 billion, though sales at its personal
electronics business fell 28% to $990 million.
Still, overall revenue came above Visible Alpha consensus of
$4.38 billion, Citi analysts said.
STMicroelectronics is now forecasting net revenue of about $17.3
billion for the year, and a gross margin of about 48.1%. It had
previously guided for net revenue of $17.4 billion, plus or minus
$150 million, and a gross margin exceeding 48%.
Write to Mauro Orru at mauro.orru@wsj.com
(END) Dow Jones Newswires
October 26, 2023 04:16 ET (08:16 GMT)
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