STMicroelectronics (ST) has reported fourth quarter net revenues of $4.28 billion, gross margin of 45.5%, operating margin of 23.9%, and net income of $1.08 billion for the fourth quarter ended December 31, 2023.

“FY23 revenues increased by 7.2% to $17.29 billion,” says Jean-Marc Chery, ST President & CEO. “Operating margin was 26.7% compared to 27.5% in FY22 and net income increased by 6.3% to $4.21 billion. We invested $4.11 billion in net CAPEX while delivering free cash flow of $1.77 billion.”

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,” added Chery. “We continued to see stable end-demand in automotive, no significant increase in personal electronics, and further deterioration in industrial. Our first quarter business outlook, at the mid-point, is for net revenues of $3.6 billion, decreasing year-over-year by 15.2% and decreasing sequentially by 15.9%. Gross margin is expected to be about 42.3%.” He said the company plans to invest about $2.5 billion in net CAPEX for 2024.

“We will drive the Company based on a plan for FY24 revenues in the range of $15.9 billion to $16.9 billion. Within this plan, we expect a gross margin in the low to mid-40’s,” said Chery.

Net revenues totaled $4.28 billion, representing a year-over-year decrease of 3.2%. On a year-over-year basis, ADG revenues increased 21.5%, while AMS and MDG decreased 25.8% and 11.5% respectively. Year-over-year net sales to OEMs and Distribution decreased 0.4% and 9.2%, respectively. On a sequential basis, net revenues decreased 3.4%, 40 basis points lower than the mid-point of ST’s guidance. On a sequential basis, ADG reported an increase in net revenues, AMS was stable and MDG decreased.

Gross profit totaled $1.95 billion, representing a year-over-year decrease of 7.3%. Gross margin of 45.5%, 50 basis points below the mid-point of ST’s guidance, decreased 200 basis points year-over-year, due to higher input manufacturing costs, unused capacitycharges, and negative currency effect net of hedging, partially offset by the combination of sales price and product mix.

Operating income decreased 20.5% to $1.02 billion, compared to $1.29 billion in the year-ago quarter. ST’s operating margin decreased 520 basis points on a year-over-year basis to 23.9% of net revenues, compared to 29.1% in the fourth quarter of 2022.

By product group, compared with the year-ago quarter:

Automotive and Discrete Group (ADG)

* Revenue increased for both Automotive and Power Discrete.

* Operating profit increased by 7% to $657 million. Operating margin was 31.9% compared to 27.7%.

Analog, MEMS and Sensors Group (AMS)

* Revenue increased in Analog and decreased in Imaging and in MEMS.

* Operating profit decreased by 4% to $147 million. Operating margin was 14.8% compared to 25.8%.

Microcontrollers and Digital ICs Group (MDG)

* Revenue decreased for Microcontrollers and increased for RF Communications.

* Operating profit decreased by 9% to $342 million. Operating margin was 28.0% compared to 35.8%.

Net income decreased to $1.08 billion compared to $1.25 billion in the year-ago quarter. Both the fourth quarter 2023 and the fourth quarter 2022 financial results included one-time non-cash income tax benefits of $191 million and $141 million respectively. Diluted earnings per share decreased to $1.14 compared to $1.32 in the year-ago quarter.

By: DocMemory
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